OPEC and non-OPEC Ministerial meeting highlights importance of ongoing rebalancing efforts

The 16th OPEC and non-OPEC Ministerial Meeting of the Declaration of Cooperation (DoC) took place via teleconference on Tuesday, 27 April 2021, under the Chairmanship of HRH Prince Abdul Aziz bin Salman, Saudi Arabia’s Minister of Energy, and Co-Chair HE Alexander Novak, Deputy Prime Minister of the Russian Federation.

The Meeting emphasized the ongoing positive contributions of the Declaration of Cooperation in supporting a rebalancing of the global oil market in line with the historic decisions taken at the 10th (Extraordinary) OPEC and non-OPEC Ministerial Meeting (ONOMM) on 12 April 2020 to adjust downwards overall crude oil production, and subsequent decisions.

The Meeting highlighted the continuing recovery in the global economy, supported by unprecedented levels of monetary and fiscal support, while noting that the recovery is expected to pick up speed in the second half of the year. The Ministerial Meeting emphasized, however, that COVID-19 cases are rising in a number of countries, despite the ongoing vaccination campaigns, and that the resurgence could hamper the economic and oil demand recovery.

The Meeting reviewed the monthly report prepared by the Joint Ministerial Monitoring Committee (JMMC), including the crude oil production data for March 2021, and welcomed the positive performance of the Participating Countries. Overall conformity to the production adjustments was 115% in March 2021, reinforcing the trend of high conformity by the Participating Countries.

The Meeting expressed its appreciation to the Participating Countries that performed beyond expectation in March 2021, with total overconformed volumes of 1.23 mb/d. However, some Participating Countries have yet to achieve the minimum expectation of 100% conformity and to compensate for overproduced volumes.

The Meeting further noted that DoC Participating Countries pledged to achieve full conformity and make up for previous adjustment shortfalls during the extended compensation period, which runs through the end of September 2021, and stressed the importance of accelerating the market rebalancing efforts without delay. It reminded all Participating Countries to remain vigilant and flexible given the uncertain market conditions.

The Meeting noted, with gratitude, the significant additional voluntary supply adjustment of 1 mb/d made by Saudi Arabia in April 2021 and a gradual return of these volumes in May, June and July 2021, given the prevailing uncertainties surrounding the pace of the oil demand recovery.

The Meeting observed the destocking trend of commercial OECD inventories, but noted that they increased by 14.4 mb in March 2021 and were 77.4 mb above the 2015-2019 average.

Under the referred circumstances, the Ministerial Meeting decided on the continued implementation of the production adjustment decision of the 15th OPEC and non-OPEC Ministerial Meeting (in the months of June and July as per the attached table).

It was decided that the 30th JMMC Meeting and the 17th OPEC and non-OPEC Ministerial Meeting will take place on 1 June 2021.

The Meeting thanked the JMMC, Joint Technical Committee (JTC) and the OPEC Secretariat for their contributions to the meeting.