Oil producers urged to comply with output cuts
OIL cartel OPEC and its allies have been urged to comply fully with production cuts amid falling crude prices.
Last month, ministers of OPEC nations and other major oil producers stuck to an agreement to lower oil production, underlining that only strict compliance could restore stability to prices sent plummeting by the coronavirus pandemic.
But the oil cartel has called out laggards for over-producing and failing to implement their share of the cuts.
“Full compliance is not an act of charity,” Saudi Energy Minister Abdulaziz bin Salman said at a video conference of the expanded OPEC+ grouping of crude producing nations. “It is an integral part of our collective effort to maximise the interest and gains of every individual member of this group.”
“Tactics to over-produce and hide non-compliance have been tried many times in the past, and always end in failure,” he said.
“They are damaging not only for those who carry them, but for us all.”
Although more countries around the world are gradually moving out of lockdown, crude consumption has not returned to pre-confinement levels, which were already relatively low.
Under the terms of an agreement in April, OPEC and the so-called OPEC+ pledged to cut output by 9.7 million barrels per day (bpd) from May 1 until the end of June.
The cuts were then to be gradually eased from July, to 7.7 million bpd until December.
But crude prices have stubbornly traded in a narrow range for months, with US benchmark, West Texas Intermediate (WTI), and Europe’s Brent North Sea contracts hovering around $40 per barrel.