OPEC has had to remind once again the laggards in compliance in the OPEC+ oil production deal to submit plans on how they will compensate for pumping above their respective quotas in recent months, sources at OPEC told Energy Intelligence this week.
There are 10 producers in the OPEC+ alliance who have overproduced beyond their allowances since the latest pact became effective on May 1 last year. Of those 10 producers, as many as seven have yet to submit plans to the OPEC Secretariat on how they plan to compensate for breaching their quotas, the sources told Energy Intelligence.
At the latest ministerial meeting of OPEC+, the ministers noted at the end of April that all countries "pledged to achieve full conformity and make up for previous adjustment shortfalls during the extended compensation period, which runs through the end of September 2021, and stressed the importance of accelerating the market rebalancing efforts without delay."
The ministers, however, noted that some countries "have yet to achieve the minimum expectation of 100% conformity and to compensate for overproduced volumes," OPEC said.
Among those laggards, Iraq, Equatorial Guinea, and Gabon have submitted plans for compensation schedules, but Russia, Congo, Azerbaijan, Brunei, Kazakhstan, Sudan, and South Sudan have not, OPEC sources told Energy Intelligence.
As per estimates by Energy Intelligence, in the year after the OPEC+ pact was implemented, OPEC members overproduced by 120,000 barrels per day (bpd), while non-OPEC members produced just over 180,000 bpd over their combined quotas. Russia is estimated to be the OPEC+ producer that has overproduced the largest volume between May 1, 2020, and April 30, 2021, pumping at 80,000 bpd above its quota on average for the year to end-April.
According to Energy Intelligence's sources, Russia thinks that complying at around 95-96 percent is good enough. The other key member of the OPEC+ alliance, Saudi Arabia, has started to accept that the lack of full Russian compliance could be the price to pay for keeping Moscow firmly supporting and participating in the production cut deal.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. More