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Contrary to initial reports that OPEC will not make public the country quotas in the new production cut deal, the cartel now plans to publish a table of each OPEC and non-OPEC individual quotas in an attempt to inject some positive sentiment in a crashing oil market, OPEC’s Secretary General Mohammad Barkindo wrote in a letter seen by Reuters.
“In the interests of openness and transparency, and to support market sentiment and confidence, it is vital to make these production adjustments publicly available,” Barkindo wrote to the members in the letter.
“I would urge Your Excellencies to kindly make positive announcements reinstating your countries’ commitment to implementing the agreed decisions. This is also vital to underpin trust in our decisions and to buttress ourselves from any naysayers who may doubt our commitment,” the letter says.
Earlier this month, OPEC and its Russia-led allies reached a deal to reduce their combined oil production by 1.2 million bpd for six months starting January, and initial hints from the cartel suggested that it won’t be announcing individual quotas.
The contribution from OPEC in the deal would be 800,000 bpd, equal to a 2.5-percent cut, while non-OPEC countries would contribute with 400,000 bpd, or a 2.0-percent reduction, OPEC said in the statement following the meeting in Vienna two weeks ago.
In his letter seen by Reuters, OPEC’s Barkindo says that the effective reduction needs to be 3.02 percent for member countries in order to reach the 1.2-million-barrel total cut. Iran, Venezuela, and Libya were exempted from cuts, so other OPEC members had to tweak some quotas to accommodate those three ‘special consideration’ countries.
The detailed table with country quotas is expected to be published by the end of this week.
According to that table, Saudi Arabia’s share of the cuts is 322,000 bpd, but in his letter Barkindo praises the Kingdom for committing to cut more and reduce production to 10.2 million bpd, a deeper cut than quotas show. The leader of the non-OPEC nations Russia has been handed a 230,000-bpd cut. OPEC’s total cut is 812,000 bpd, while non-OPEC’s reduction is 383,000 bpd, according to CNBC.
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.