Vienna/Moscow, Apr 27 (EFE).- The OPEC+ alliance led by Saudi Arabia and Russia confirmed after a meeting Tuesday that it is sticking with plans announced on April 1 to gradually boost crude output between May and July.
“The Ministerial Meeting decided on the continued implementation of the production adjustment decision” of the preceding Organization of the Petroleum Exporting Countries and non-OPEC Ministerial Meeting, the 23-member coalition said in a statement following the teleconference.
A full OPEC+ meeting had been scheduled for Wednesday but has been canceled.
“We reviewed the market situation and once again confirmed the decisions that were made a month ago on the production level for May, June and July of this year,” Russian Deputy Prime Minister Alexander Novak told the Russia-24 state-owned news channel.
The increase includes the unwinding of voluntary additional production cuts by Saudi Arabia, which had slashed output by an extra 1 million barrels per day in February and March amid coronavirus-triggered doubts about crude demand.
Production therefore will rise by 600,000 bpd in May (350,000 from the other OPEC+ nations and 250,000 from Riyadh), 700,000 bpd in June (350,000/OPEC+ and 350,000/Riyadh) and 841,000 in July (441,000/OPEC+ and 400,000/Riyadh).
That increase will make it possible to “achieve the production levels anticipated for 2021 considering rising demand” as economies recover from the coronavirus crisis.
Novak, who presided over Tuesday’s meeting along with Saudi Energy Minister Abdulaziz bin Salman, alluded to massive supply cuts totaling 9.7 million bpd that OPEC+ agreed to carry out in May and June 2020 in response to plummeting demand at the onset of the coronavirus crisis.
The former Russian energy minister said the market is now recovering and that increased mobility is occurring within cities and the volume of air transport also is growing.
Nevertheless, he cautioned that the current spike in coronavirus cases in some regions, particularly in India and Latin America, “is generating a certain level of concern in the market.”
“The next ministerial meeting will be June 1. We’ll evaluate production levels for July, August. And we’ll analyze the situation in general through year’s end,” he said.
Novak added that overall conformity with production cuts reached 115 percent in March, which was perhaps “the highest level of execution in the entire period” dating back to OPEC+’s April 2020 meeting.
In the final statement from the OPEC and non-OPEC Ministerial Meeting, the participating countries stressed that “the continuing recovery in the global economy” has been “supported by unprecedented levels of monetary and fiscal support.”
Even so, the statement warned that a resurgence in Covid-19 cases “could hamper the economic and oil demand recovery” and noted that the countries were reminded to “remain vigilant and flexible given the uncertain market conditions.” EFE