19th OPEC and non-OPEC meeting highlights ongoing strengthening of oil market fundamentals

Oil illustrationThe 19th OPEC and non-OPEC Ministerial Meeting (ONOMM), held via videoconference, has noted the ongoing strengthening of market fundamentals, with oil demand showing clear signs of improvement and OECD stocks falling, as the economic recovery continued in most parts of the world with the help of accelerating vaccination programmes

The Meeting welcomed the positive performance of participating countries in the Declaration of Cooperation (DoC). Overall conformity to the production adjustments was 113% in June (including Mexico), reinforcing the trend of high conformity by Participating Countries.

In view of current oil market fundamentals and the consensus on its outlook, the Meeting resolved to:

Reaffirm the Framework of the Declaration of Cooperation, signed on 10 December 2016 and further endorsed in subsequent meetings, including on 12 April 2020.

Extend the decision of the 10th OPEC and non-OPEC Ministerial Meeting (April 2020) until the 31st of December 2022.

Adjust upward their overall production by 0.4 mb/d on a monthly basis starting August 2021 until phasing out the 5.8 mb/d production adjustment, and in December 2021 assess market developments and Participating Countries’ performance.

Continue to adhere to the mechanism to hold monthly OPEC and non-OPEC Ministerial Meetings for the entire duration of the Declaration of Cooperation, to assess market conditions and decide on production level adjustments for the following month, endeavoring to end production adjustments by the end of September 2022, subject to market conditions.

Adjust, effective 1 May 2022, the baseline for the calculations of the production adjustments.

Reiterate the critical importance of adhering to full conformity and taking advantage of the extension of the compensation period until the end of September 2021. Compensation plans should be submitted in accordance with the statement of the 15th OPEC and non-OPEC Ministerial Meeting.

The meeting decided to hold the 20th OPEC and non-OPEC Ministerial Meeting on 1 September 2021.

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