A joint OPEC/non-OPEC technical committee will be meeting in Abu Dhabi on next week to discuss ways to improve compliance by members that have not been sticking 100 percent to their output quotas so far.
The calling of the meeting, to be held on August 7 and 8, follows the Joint OPEC-Non-OPEC Ministerial Monitoring Committee (JMMC) session in Russia on July 24, which “noted that despite the high level of conformity at the aggregate level, there is still room for improvement by some participating producing countries, and demanded that all participating producing countries must promptly reach full conformity.”
The monitoring committee has estimated total OPEC/non-OPEC compliance was 98 percent in June, but OPEC-only compliance, according to the IEA, plunged to 78 percent last month from 95 percent in May. Non-OPEC compliance in June was 82 percent, according to the IEA.
The new meeting comes as Saudi Arabia scolded last week non-compliant producers, urging them to fall in line. After the meeting in St. Petersburg, Saudi energy minister Khalid al-Falih said, “We are going to forcefully demand participation of all,” as quoted by FT.
Saudi Arabia and Russia would escalate non-compliance to “leadership beyond oil ministers if we do not see a response”, al-Falih said, adding that the Saudis were no longer willing to let some producers have a “free ride” while others cut as pledged.
Iraq is the worst compliant producer so far, with output averaging 69,000 bpd over its quota between January and June, according to S&P Global Platts OPEC survey—which is one of OPEC’s secondary sources.
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Iraq had disputed secondary sources estimates before signing up to the deal.
At the meeting in Abu Dhabi, the UAE, some producers will argue that secondary sources are overestimating their output, Bloomberg reports, quoting two people familiar with the matter.
The meeting in Abu Dhabi will be co-chaired by Kuwait and Russia. Saudi Arabia, which is serving as president of OPEC this year, will also attend, OPEC said. (By Tsvetana Paraskova for Oilprice.com)