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OPEC+ Committee Calls on Members to Compensate for Overproduction

The Joint Ministerial Monitoring Committee (JMMC), the OPEC+ panel that monitors oil market developments and the group’s production cuts, didn’t recommend on Wednesday any changes to output policy but noted that compliance with the cuts needs to improve.

The JMMC held a brief regular meeting today and, as widely expected, did not recommend to the OPEC+ ministers to change the current levels of oil production cuts. However, the panel, which doesn’t decide policy but only recommends a course of action to the ministers, said that it welcomes the pledges from Iraq and Kazakhstan to reach full conformity with the cuts they have announced.

“Participating countries with outstanding overproduced volumes for the months of January, February, and March 2024 will submit their detailed compensation plans to the OPEC Secretariat by 30 April 2024,” OPEC said in a statement after the JMMC meeting today.

The panel met via video conference and “welcomed the Republic of Iraq and the Republic of Kazakhstan pledge to achieve full conformity as well as compensate for overproduction,” OPEC said.

In the middle of February, both Iraq and Kazakhstan pledged to comply with the cuts they had announced.

OPEC’s second-largest producer, Iraq, is committed to its voluntary cut in the OPEC+ agreement and will produce no more than 4 million bpd of crude oil, Iraq’s Oil Minister Hayan Abdel-Ghani said in February.

Non-OPEC oil producer Kazakhstan, for its part, vowed to compensate over the coming months for a lack of compliance with the cuts in January.

Following today’s meeting of the panel, OPEC said “The Committee also welcomed the announcement by the Russian Federation that its voluntary adjustments in the second quarter of 2024 will be based on production instead of exports.”  

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Russia will be cutting oil production instead of exports in the second quarter of 2024 so that all OPEC+ producers that reduce output contribute equally to the cuts, Russian Deputy Prime Minister Alexander Novak said last week.

By Charles Kennedy for Oilprice.com

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