OPEC Joint Ministerial Monitoring Committee which met on Sunday in Jeddah, Saudi Arabia, reviewed market forecasts, assessed compliance with quotas and discussed options on extending the supply accord under which OPEC and 10 non-OPEC partners agreed to cut 1.2 mbd through June.
Front month Brent crude futures closed Friday at $72.21/b and have risen more than a third since the beginning of the year, largely due to the OPEC/non-OPEC coalition’s output declines.
With the US not renewing sanctions waivers for buyers of Iranian oil, the Trump administration is pressuring Saudi Arabia and the UAE to boost production to fill the expected supply gap and keep prices low.
But the Saudi and UAE energy ministers on Saturday indicated they would like to see the OPEC/non-OPEC supply accord continued, citing global oil inventory builds.
However, they said they stand ready to increase production if a market squeeze does emerge.
If there was an oil shortage, you would have seen prices skyrocket,” Kuwaiti Oil Minister Khaled al-Fadhel told S&P Global Platts on Sunday in Jeddah, Saudi Arabia, where an OPEC/non-OPEC monitoring committee meeting was taking place.
Kuwait, which is currently producing around 2.7 mbd, in line with its quota, believes current oil prices are “still fluctuating” but can be handled by both consumers and producers, he said.
“We are able to increase, in case OPEC decides we should increase, our production level to meet the market demand,” said Fadhel, who declined to reveal Kuwait’s production capacity.
Iraqi Oil Minister Thamir al-Ghadbhan told Platts that Iraq was in full compliance with its quota and that he “fully supports” keeping production cuts in place beyond their June expiry.
OPEC’s second largest producer was pumping 4.5 mbd, he said, under its quota of 4.51 mbd.
On Saturday, UAE Energy Minister Suhail al-Mazrouei said he was satisfied with OPEC’s overall compliance levels, but that countries who have exceeded their quotas would be pressured by the group to bring their production levels down.
“At the end of the day, what is important is the collective compliance,” Mazrouei told reporters.
“Those who are not complying, they will get letters, and we talk to them and they will need to adjust their conformity. Of course, some countries cut more than they were supposed to do to ensure overall OPEC as a group are delivering the target.”
The OPEC/non-OPEC coalition’s compliance in April stood at a collective 168 percent, delegates told Platts on Saturday, with Saudi Arabia, OPEC’s largest producer, some 500,000 bpd below its quota of 10.31 mbd.