5 Oct 2022 18:46

OPEC+ slashes output quota by 2 mln bpd, extends deal through 2024, ministerial meeting to take place every half year from Dec 4

MOSCOW. Oct 6 (Interfax) - OPEC+ ministers, in light of the uncertainty that surrounds the global economic and oil market outlooks, and the need to enhance the long-term guidance for the oil market, and in line with the successful approach of being proactive, and preemptive, which has been consistently adopted by member countries, have reached a number of decisions, the organization's secretariat said in a statement. First of all, the agreement has been extended through December 31, 2023. Starting from November, the oil production quota has been slashed by 2 million bpd as compared to August levels (which were the same as October quotas). The countries also decided to “[r]econfirm the baseline adjustment approved at the 19th OPEC and non-OPEC Ministerial Meeting.” At that meeting, in July 2021, the countries decided to raise the baseline for reducing production as of May 2022 for five countries by a total of 1.63 million bpd, including from 11 million to 11.5 million bpd for Saudi Arabia and Russia, from 3.2 million bpd to 3.5 bpd for the United Arab Emirates, from 4.65 million to 4.8 million bpd for Iraq and from 2.8 million to 2.96 million bpd for Kuwait. It was also announced at the time that, despite the increase in the baseline, the production quota from May would still be raised by 400,000 bpd to fully phase out the output reduction. Until September 2022, the degree of compliance with the deal was calculated from the baselines adopted in May 2020. The ministers also decided to reduce the regularity of meetings of the OPEC+ Joint Ministerial Monitoring Committee (JMMC) from one to two months. Full-format OPEC+ ministerial meetings will now be held semi-annually in conjunction with OPEC Conferences. The JMMC can request an OPEC+ ministerial meeting at any time if necessary. The next OPEC+ ministerial meeting is scheduled for December 4. The compensation period is being extended through March 31, 2023.