Oil producers committed to output cut deal, says OPEC
Global oil producers said on Tuesday they remained committed to cutting output and stemming the collapse in oil prices, OPEC said.
A technical panel including members of the Saudi-led cartel and other oil producers made the statement after a two day session in Abu Dhabi.
Some exporters have produced more oil than agreed under the November deal, raising doubts about OPEC’s ability to enforce it.
OPEC said Iraq, the United Arab Emirates and Kazakhstan - who have lagged in their implementation of a deal to cut production - affirmed their commitment to the accord.
‘All expressed their full support’ for the system to monitor the cutbacks ‘in order to achieve the goal of reaching full conformity’, OPEC said in a statement on its website. Malaysia also attended and made the same pledge.
The meeting, co-chaired by Kuwait and Russia, was scheduled after several nations faltered in their pledges to reduce output. Twenty four producers, from among the Organization of Petroleum Exporting Countries and beyond, agreed to cut production late last year to try to end a global glut.
Oil prices have lost eight per cent this year on concern the agreement is failing to drain the world’s bloated oil stockpiles. Saudi Arabian Energy Minister Khalid al Falih promised last month to intensify pressure on cheating countries.
Iraq and the UAE said at the meeting that OPEC’s estimates of their production - based on data from external sources - were at fault for any apparent failures to comply, according to two people familiar with the matter who asked not to be identified. Iraqi compliance slumped to 29 per cent in June, its lowest so far, while the UAE made just 60 per cent of its cuts, according to data from the International En- ergy Agency (IEA). Iraq has complained that the estimates OPEC uses to monitor compliance are inaccurate, and that it has actually made the full reduction required.
Kazakhstan, rather than reduce its output as promised, has steadily increased it, with the expansion of its Kashagan oilfield.
OPEC uses supply estimates compiled from six external entities, known as secondary sources, to monitor adherence to the deal. These include media outlets and institutions like the Paris-based IEA and the US government’s Energy Information Administration.
While the committee met, there were further signs of the diplomatic push to ensure full compliance.
Iraq’s Oil Minister, Jabbar al Luaibi, is flying to Saudi Arabia at the invitation of Falih, Iraq’s Oil Ministry said on Tuesday. The two officials will discuss coordination to achieve OPEC’s goals, Asim Jihad, a spokesman for the Iraq’s Oil Ministry, said.
The agreement, which came into effect at the start of the year, brings together OPEC and nonOPEC nations in an effort to take as much as 1.8mn barrels of oil a day off the market.
Russia and Kuwait are two of the five nations that sit on the board that oversees the implementation of supply curbs. The panel’s conclusions will be discussed when the full technical committee next meets, on August 21 in Vienna, OPEC said.