OPEC published on Friday the long-awaited list of oil production quotas for each country in the OPEC+ deal, as it seeks to shore up market confidence that the cartel and allies will do whatever it takes to rebalance the market.
OPEC and its non-OPEC partners led by Russia decided in early December to start a new round of cuts, aiming to lift the price of oil that had started to plummet in October on fears of building oversupply and uncertain demand growth going forward. The OPEC+ deal will be removing a combined 1.2 million bpd off the market in the first half of 2019. Initial reports just after the meeting in Vienna in early December suggested that OPEC and its allies would not be unveiling who is cutting how much under the new deal.
But two weeks later, Reuters quoted OPEC’s Secretary General Mohammad Barkindo as saying in a letter:
“In the interests of openness and transparency, and to support market sentiment and confidence, it is vital to make these production adjustments publicly available.”
Finally, OPEC published today the list of the countries which will be cutting production, leaving out OPEC members Iran, Libya, and Venezuela who were granted exemptions from the cuts that began on January 1. Related: U.S. Oil Outlook Slammed By Lower Prices
According to OPEC’s list, OPEC and non-OPEC will withhold 1.195 million bpd from the market and keep their combined production at 43.874 million bpd between January and June. The reference production level from which the partners will reduce their respective production is October 2018, except for Kuwait, Azerbaijan, and Kazakhstan, whose reference months are September 2018, September 2018, and November 2018, respectively.
OPEC is cutting a total of 812,000 bpd to a ceiling of 25.937 million bpd, while non-OPEC partners will be reducing production by a combined 383,000 bpd to 17.937 million bpd. OPEC’s de facto leader and biggest producer Saudi Arabia will cut 322,000 bpd from its October baseline of 10.633 million bpd and keep output at 10.311 million bpd. Russia will be taking the lion’s share of the non-OPEC cuts and will reduce production by 230,000 bpd from October’s 11.421 million bpd, to 11.191 million bpd.
Accompanying the publishing of the OPEC list of quotas was a brief statement from the Joint Ministerial Monitoring Committee (JMMC), which called on all participating producers “to redouble their efforts in the full and timely implementation of the supply adjustments to ensure that the oil market remains in balance in 2019.”
OPEC also confirmed that a JMMC meeting will take place in Baku, Azerbaijan on March 18, 2019.
By Tsvetana Paraskova for Oilprice.com
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