1 June 2021 - 17:36
  • News Code: 316947
17th OPEC+ Meeting Begins

TEHRAN (Shana) -- The 17th meeting of the Oil and Energy Ministers of the Organization of the Petroleum Exporting Countries (OPEC) and non-OPEC producers, a grouping called OPEC+, started a few minutes ago.

23 OPEC Plus countries stepped in the meeting in a situation where the price of Brent crude exceeded $70 at 4:09 today (Tuesday, June 1). Brent crude has risen about $6 since the coalition's 15th meeting (April 1, 1400), about $7 for the OPEC basket.

At its 15th meeting, OPEC Plus approved an increase in the coalition's daily production enhancement of 350,000 barrels in May, 350,000 barrels in June and 450,000 barrels in July. It was also decided to voluntarily reduce Saudi Arabia's one million barrels a day gradually over the three months of May, June and July by supplying the market with 250,000 barrels per day, 350,000 barrels per day and 400,000 barrels per day, respectively.

A review of OPEC Plus countries' breach of the April 2020 production cut agreement also shows that Iraq and Russia, as the biggest offenders, not only did not compensate for their failure, but the barrels of this breach increased. The total number of violations by Iraq in April reached about 770,000 barrels, and the number of violations by Russia exceeded one million barrels. The total violation of OPEC Plus has reached more than 2 million barrels. Violators are obliged to compensate by the end of September 2021.

The Oil and Energy Ministers of OPEC+ pledged to reduce their oil output in three phases at the 10th Extraordinary Meeting which was held via videoconference on April 12, 2020. In the first phase, the reduction of daily production of 9.7 million barrels per day for May and June 2020 was on the agenda; in the second phase, the supply of 7.7 million barrels of crude was approved by the members for 6 months from July 1 to December 31, 2020, and in the third phase, it was decided to reduce OPEC crude oil production by 5.8 million barrels per day for a period of 16 months from January 1, 2021 to April 30, 2022.

This agreement, however, was overshadowed by market conditions and the coronavirus pandemic on oil demand in its second phase, and OPEC Plus, at its twelfth ministerial meeting on December 3, decided to add only 500,000 b/d instead of releasing production cap by 1.9 million barrels which was originally agreed upon for January 1, 2021. At the 13th and 14th meetings, OPEC Plus stabilized the production figure by only allowing Russia and Kazakhstan a total increase of 75,000 barrels (60,000 and 15,000 barrels, respectively, for the two countries) for February and March and froze the production figure with only 150,000 b/d of increase by Russia and Kazakhstan (130,000 and 20,000 barrels, respectively) for April 2021.

Before the meeting, however, forecasts suggest that OPEC Plus members will stick to the current trend of gradual production growth. Experts from the OPEC Joint Technical Committee (JTC) also confirmed at their Monday meeting the demand growth of 6 million barrels per day in 2021 for OPEC.

News Code 316947

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