The 13th Organisation of Petroleum Exporting Countries (OPEC) and non-OPEC Ministerial Meeting (ONOMM) held virtually on Tuesday, 5th January 2021. The Meeting reconvened following an initial round of discussions a day before.
The Meeting welcomed the new Minister of Oil and Minister of Electricity and Water, Dr Mohammad Alfares, and thanked his predecessor, Dr Khaled A. Al-Fadhel, for his effort in Kuwait’s participation in Declaration of Cooperation (DoC).
The DoC participating countries at the 10th Extraordinary ONOMM that held on 12th of April, 2020, agreed to reduce the overall crude oil production, in response to the COVID-19 pandemic and its impact on the global oil and gas sector.
The Meeting recalled the decision taken at the 10th Extraordinary meeting, the unanimous decisions taken at the 11th ONOMM that held on 6th of June 2020, and the outcomes of the 12th ONOMM that took place on 3rdof December 2020.
The Meeting agreed that the decision made at the 12th ONOMM to increase production by 0.5 mb/d starting in January 2021 and adjusting production reduction from 7.7 mb/d to 7.2 mb/d will still be adhered to, regardless of fear of the second wave of COVID-19 and growing uncertainties.
The adjustment to the production levels for February and March 2021 will also be implemented, while the production adjustments for April and subsequent months will be decided during the monthly ONOMM, following the agreed-upon criteria in the 12th ONOMM.
According to the press release from the Organisation, “[The Meeting] pointed out that rising infections, the return of stricter lockdown measures and growing uncertainties have resulted in a more fragile economic recovery that is expected to carry over into 2021. The Meeting recognized that market sentiment has been buoyed recently by vaccine programmes and improved asset markets, but underscored the need for caution due to prevailing weak demand and poor refining margins, the high stock overhang and other underlying uncertainties.”
The Meeting praised the cooperation of the participating countries, particularly the United Arab Emirates (UAE) and Angola, who have performed beyond expectation. It urged laggards to fully conform, and compensate the overproduced volume per the statements of the 11th and 12th ONOMM, to achieve market rebalancing and avoid undue delay in the process.
All underperforming participating countries are to submit their plans for implementation of the required compensation for the overproduced volumes to the OPEC Secretariat by 15th January 2021.
The next Joint Ministerial Monitoring Committee (JMMC) meeting is scheduled for 3rd February 2021, followed by a JMMC Meeting on 3rd March 2021, and ONOMM on 4th March 2021.
%20and%20non-OPEC%20Ministerial%20Meeting%20(ONOMM)%20held%20virtually%20on%20Tuesday,%205supth/sup%20January%202021.%20The%20Meeting%20reconvened%20following%20an%20initial%20round%20of%20discussions%20a%20day%20before.The%20Meeting%20welcomed%20the%20new%20Minister%20of%20Oil%20and%20Minister%20of%20Electricity%20and%20Water,%20Dr%20Mohammad%20Alfares,%20and%20thanked%20his%20predecessor,%20Dr%20Khaled%20A.%20Al-Fadhel,%20for%20his%20effort%20in%20Kuwait's%20participation%20in%20Declaration%20of%20Cooperation%20(DoC).The%20DoC%20participating%20countries%20at%20the%2010supth/sup%20Extraordinary%20ONOMM%20that%20held%20on%2012supth/sup%20of%20April,%202020,%20agreed%20to%20reduce%20the%20overall%20crude%20oil%20production,%20in%20response%20to%20the%20COVID-19%20pandemic%20and%20its%20impact%20on%20the%20global%20oil%20and%20gas%20sector.The%20Meeting%20recalled%20the%20decision%20taken%20at%20the%2010th%20Extraordinary%20meeting,%20the%20unanimous%20decisions%20taken%20at%20the%2011th%20ONOMM%20that%20held%20on%206supth/sup%20of%20June%202020,%20and%20the%20outcomes%20of%20the%2012supth/sup%20ONOMM%20that%20took%20place%20on%203suprd/supof%20December%202020.The%20Meeting%20agreed%20that%20the%20decision%20made%20at%20the%2012th%20ONOMM%20to%20increase%20production%20by%200.5%20mb/d%20starting%20in%20January%202021%20and%20adjusting%20production%20reduction%20from%207.7%20mb/d%20to%207.2%20mb/d%20will%20still%20be%20adhered%20to,%20regardless%20of%20fear%20of%20the%20second%20wave%20of%20COVID-19%20and%20growing%20uncertainties.The%20adjustment%20to%20the%20production%20levels%20for%20February%20and%20March%202021%20will%20also%20be%20implemented,%20while%20the%20production%20adjustments%20for%20April%20and%20subsequent%20months%20will%20be%20decided%20during%20the%20monthly%20ONOMM,%20following%20the%20agreed-upon%20criteria%20in%20the%2012th%20ONOMM.According%20to%20thea%20href=https://www.opec.org/opec_web/en/press_room/6310.htm%20press%20release/a%20from%20the%20Organisation,%20%5BThe%20Meeting%5D%20pointed%20out%20that%20rising%20infections,%20the%20return%20of%20stricter%20lockdown%20measures%20and%20growing%20uncertainties%20have%20resulted%20in%20a%20more%20fragile%20economic%20recovery%20that%20is%20expected%20to%20carry%20over%20into%202021.%20The%20Meeting%20recognized%20that%20market%20sentiment%20has%20been%20buoyed%20recently%20by%20vaccine%20programmes%20and%20improved%20asset%20markets,%20but%20underscored%20the%20need%20for%20caution%20due%20to%20prevailing%20weak%20demand%20and%20poor%20refining%20margins,%20the%20high%20stock%20overhang%20and%20other%20underlying%20uncertainties.The%20Meeting%20praised%20the%20cooperation%20of%20the%20participating%20countries,%20particularly%20the%20United%20Arab%20Emirates%20(UAE)%20and%20Angola,%20who%20have%20performed%20beyond%20expectation.%20It%20urged%20laggards%20to%20fully%20conform,%20and%20compensate%20the%20overproduced%20volume%20per%20the%20statements%20of%20the%2011supth/sup%20and%2012supth/sup%20ONOMM,%20to%20achieve%20market%20rebalancing%20and%20avoid%20undue%20delay%20in%20the%20process.All%20underperforming%20participating%20countries%20are%20to%20submit%20their%20plans%20for%20implementation%20of%20the%20required%20compensation%20for%20the%20overproduced%20volumes%20to%20the%20OPEC%20Secretariat%20by%2015th%20January%202021.The%20next%20Joint%20Ministerial%20Monitoring%20Committee%20(JMMC)%20meeting%20is%20scheduled%20for%203rd%20February%202021,%20followed%20by%20a%20JMMC%20Meeting%20on%203rd%20March%202021,%20and%20ONOMM%20on%204th%20March%202021.){kind=link}