Kuwait Times, Sunday, Apr 4, 2021 | Shaaban 21, 1442
Kuwait welcomes OPEC+ deal, stresses continued cooperation
Kuwait:
Minister of Oil Mohammad Al-Fares extolled the successful meeting of
OPEC+, affirming the importance of continuing cooperation to restore market
balance. The positive developments of the last period contributed to a
noticeable improvement in oil market situation that reflected on expectations to
improve demands in light of the spread of coronavirus and distribution of
vaccines, Al-Fares, who also doubles as Minister of Higher Education, said in a
statement carried by the Ministry of Oil on Thursday. Based on this development,
OPEC+ ministers agreed on moving forward with a gradual increase of output with
350,000 barrels per day (bpd) in May and June each, and 440,000 bpd in July, he
noted.
Kuwait’s quota of this rise is 29,000 bpd in May and June each, and 38,000 bpd
in July, he revealed. Saudi Arabia will gradually increase its output with
250,000 bpd in May, 350,000 in June and 400,000 in July, he said. The minister
underlined the importance of abiding by the specific quotas stipulated in the
deal. The next OPEC+ meeting will be held on April 28 to review the effect of
the deal and market situation in the upcoming period, he pointed out.
Positive
contributions
The 15th meeting of OPEC and non-OPEC ministers took place via videoconference
on Thursday, under the chairmanship of Prince Abdulaziz Bin Salman, Saudi
Arabia’s Minister of Energy, and Co-Chair Alexander Novak, Deputy Prime Minister
of the Russian Federation, and decided to raise output as of May. The meeting
emphasized the ongoing positive contributions of the Declaration of Cooperation
(DoC) in supporting a rebalancing of the global oil market, said a statement by
the OPEC secretariat. These outcomes are in line with the historic decisions
taken at the 10th (Extraordinary) OPEC and non-OPEC ministerial meeting on 12
April, 2020 to adjust downwards overall crude oil production, and subsequent
decisions, it added.
The ministers noted, with gratitude, the value of the prudent policy approach by
Saudi Arabia of maintaining its additional voluntary adjustments of 1 mb/d in
April 2021 for third month in a row. The meeting approved the adjustment of the
production levels for May, June and July 2021, while continuing to adhere to the
mechanism agreed upon in the 12th OPEC and non-OPEC ministerial meeting
(December 2020) to hold monthly OPEC and non-OPEC ministerial meetings to assess
market conditions and decide on production level adjustments for the following
month, with every adjustment being no more than 0.5 mb/d, it noted.
The ministers reviewed the monthly report prepared by the Joint Technical
Committee (JTC), including the crude oil production data for February. They
recognized the improvements in the market supported by global vaccination
programs and stimulus packages in key economies but noted that the volatility
observed in recent weeks warrants a continued cautious and vigilant approach in
monitoring market developments.
The meeting observed that in February, oil stocks in OECD countries fell for the
seventh consecutive month, but still remained above the 2015-2019 average, it
stated. The meeting welcomed the positive performance of participating
countries. Overall conformity reached 115 per cent in February 2021, reinforcing
the trend of aggregate high conformity by participating countries, it pointed
out.
The ministers noted that since the April 2020 meeting, OPEC and non-OPEC
Participating Countries in the DoC had contributed to adjusting downward global
oil supply by 2.6 billion barrels of oil by the end of February 2021, which has
accelerated the rebalancing of the oil market. The ministers expressed their
thanks to those countries that have submitted plans for previous compensation
shortfalls and continue to work towards compensating for overproduced volumes,
it said.
They urged all participants to achieve full conformity to reach the objective of
market rebalancing and avoid undue delay in the process. In this regard, the
ministers agreed to the request by several countries that have not yet completed
their compensation for an extension of the compensation period until the end of
September 2021.
Outstanding volumes
The ministers agreed that participating countries with outstanding overproduced
volumes will submit their plans for implementation of any required compensation
for overproduced volumes to the OPEC Secretariat by April 15, 2021. The meeting
commended Saudi Arabia for its recently announced “Saudi Green Initiative” and
“Middle East Green Initiative” as important contributions to global efforts to
combat climate change, and welcomed Saudi Arabia’s commitment to transfer
knowledge and share experiences as art of these initiatives, it elaborated.
The oil and gas industry can be part of the solution to climate change. OPEC
possesses critical resources and expertise that can help meet the challenge of
reducing global greenhouse gas emissions. The group will explore ways to enhance
collaboration in this important area.
G20 Leaders have already endorsed the strategy advanced by Saudi Arabia to deal
with climate change – the Circular Carbon Economy and its 4Rs – reduce, reuse,
recycle, and remove – as an inclusive and balanced solution for dealing with
greenhouse gas emissions. The ministers thanked the JTC and the OPEC Secretariat
for their contributions to the meeting. The next meetings of the Joint
Ministerial Monitoring Committee (JMMC) and OPEC and non-OPEC Ministers are
scheduled for April 28, 2021, it said.