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The OPEC+ group has as much as 2.31 million barrels per day (bpd) of oil production above the collective quota for May-July to offset in August and September, Reuters reported on Thursday, quoting an internal OPEC+ document it had seen.
OPEC+ launched in May a record 9.7 million bpd production cut in response to the crash in demand in the pandemic. The cuts are being eased to 7.7 million bpd as of August 1, a month later than initially planned. Non-compliant members promised to offset their poor compliance between May and July with extra cuts in August and September.
The internal document Reuters has seen does not explain in detail how those extra cuts would be distributed in August and September. The estimates from OPEC+ show that Iraq was overproducing at a rate of 851,000 bpd between May and July—this was the least compliant member of the pact. Iraq has promised to cut much more to offset poor compliance, but its July production rose by 39,000 bpd to average 3.752 million bpd, according to OPEC’s latest Monthly Oil Market Report (MOMR).
Nigeria was also overproducing a lot between May and July, pumping 315,000 bpd above its ceiling, according to the OPEC+ document seen by Reuters.
Russia, the leader of the non-OPEC group in the OPEC+ coalition, was also producing above its quota – 283,000 bpd more than it should be in order to be in full compliance.
Related: Saudi Oil Minister: Oil Demand Could See A 97% Recovery By The End Of 2020
The Joint Ministerial Monitoring Committee (JMMC), which met on Wednesday, said it had requested other underperforming participating countries to submit their plans for implementation of the required compensation for the overproduced volumes to the OPEC Secretariat by the end of next week, August 28.
“The Committee emphasized that achieving 100% conformity from all participating countries in the DoC and compensating for the shortfalls in May, June and July 2020 is not only fair, but vital for the ongoing rebalancing efforts and to help deliver long-term oil market stability,” OPEC said at the end of the video meeting.
The OPEC+ panel also admitted that “the pace of recovery appeared to be slower than anticipated with growing risks of a prolonged wave of COVID-19.”
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.