OPEC+ members will remain united in their stewardship of the oil market, whether or not their current production cuts are extended beyond their currently scheduled March expiry, OPEC Secretary General Mohammed Barkindo said Monday.
Russian energy minister Alexander Novak has suggested that his country may seek to exit the production cuts, but Barkindo said the charter of cooperation between the 24-member OPEC+ coalition is about more than just supply adjustments.
The agreement calls on the members to regularly consult on the oil market, but does not commit any party to specific production caps.
“The bond between participating countries has become very strong, including, of course, personal friendships across capitals and nations,” he said on the sidelines of the International Petroleum Technology Conference in Saudi Arabia. “This partnership has come to stay for the good of OPEC and non-OPEC [producers], as well as consuming countries and the global economy.”
OPEC, Russia and nine other countries are entering their fourth year of production cuts aimed at supporting oil prices, with the current deal that went into force January 1 calling on the coalition to slash 1.7 million b/d of output through March. Saudi Arabia has also pledged to cut a further 400,000 b/d if all other members respect their production quotas.
The alliance will meet again March 5-6 in Vienna to decide on the future of the deal.
The cuts will help keep the oil market stable through the first half of the year, Barkindo said.
“We remain confident that the full and timely implementation of the [cuts] will keep the market in check and maintain stability through the first and second quarter of 2020,” he said.
Last month, the Organisation of the Petroleum Exporting Countries (OPEC) trimmed its crude oil production by 100,000 b/d in December, the latest S&P Global Platts survey finds, putting the bloc under its new, more-stringent quotas a month early.
OPEC pumped 29.55 million b/d, according to the survey, with Saudi Arabia producing well below its cap and compliance laggards Iraq and Nigeria improving their discipline.
Nigeria pumped 1.84 million b/d, according to the survey. That is 90,000 b/d above its 2020 quota, although Nigeria has insisted that some of its barrels should be counted as condensate, which is not subject to production restrictions under the deal.
The country had proposed 2.3 million barrels daily crude oil production for 2019 but output remains below target and above OPEC quota.
The 10 members with quotas under the accord, which exempts Iran, Libya, and Venezuela, produced 25.06 million b/d in December, making good on their new collective ceiling of 25.15 million b/d.