The OPEC+ group approved raising their oil production targets for September by 100,000 bpd as suggested by the Joint Ministerial Monitoring Committee (JMMC), which met earlier today.
Before the meeting on Wednesday, the U.S. Department of State gave its approval on Tuesday to a potential foreign military sale of PATRIOT MIM-104E Guidance Enhanced Missile-Tactical Ballistic Missiles (GEM-T) and related equipment to Saudi Arabia, the top producer in OPEC, for an estimated $3.05 billion. Additionally, the State Department approved a potential $2.245 billion foreign military sale to the United Arab Emirates (UAE).
The only two producers in OPEC+ and the entire globe with the spare capacity to increase their oil output are currently thought to be Saudi Arabia and the United Arab Emirates. A 100,000 bpd rise for the entire group will probably increase Saudi Arabia’s to less than 30,000 bpd and the UAE’s to less than 10,000 bpd.
Preliminary data for OECD commercial oil stocks level in June 2022 stood at 2,712 MB, which was 163 MB lower than the corresponding period in the previous year and 236 MB below the average for the period from 2015 to 2019. The meeting also noted that emergency oil stocks have fallen to their lowest levels in more than 30 years. The Meeting further observed that thanks to several participating nations’ voluntary contributions, the average level of Declaration of Cooperation conformance has increased to 130% since May 2020.
According to a source cited by Fox Business’ White House correspondent Edward Lawrence, Saudi Arabia had promised US President Joe Biden during their meeting in the Kingdom on July 16 that it would push for an increase in production. President Biden’s visit to the Kingdom last month was partially motivated by increased oil output, though the White House declined to publicly state this.
The Participating Countries decided to:
- “Reaffirm the decision of the 10th OPEC and non-OPEC Ministerial Meeting on 12 April 2020 and further endorsed in subsequent meetings including the 19th OPEC and non-OPEC Ministerial Meeting on the 18 July 2021.
- Adjust upward the production level for OPEC and non-OPEC Participating Countries by 0.1 mb/d for the month of September 2022 as per the attached table. This adjustment does not affect the baselines decided on the above-mentioned Meeting on 18 July 2021.
- Reiterate the critical importance of adhering to full conformity and to the compensation mechanism. Compensation plans should be submitted in accordance with the statement of the 15th OPEC and non-OPEC Ministerial Meeting.
- Hold the 32nd OPEC and non-OPEC Ministerial Meeting on 5 September 2022.”