The 179th meeting of the Organization of the Petroleum Exporting Countries (OPEC) was held via e-conferencing today, 6th of June, 2020, under the leadership of its president, Mohamed Arkab, Minister of Energy in Algeria.

The conference welcomed the new ministers representing Iraq and the Bolivarian Republic of Venezuela. His Excellency, Dr Ali Haidar Abdulameer Allawi, Minister of Finance and Acting Minister of Oil in Iraq, and HE Tarecck El Aissami, People’s Minister of Petroleum in Venezuela, replace HE Thamir Abbas Al-Ghadhban, and HE Manuel Salvador Quevedo Fernanzez respectively. The conference thanked the predecessors for their dedicated time while in office.

The positive outcome of its oil cut deal from the last meeting on 5th of March, 2020 was also looked into. The conference attributed the stability and gradual rise in oil price to the compliance of all participating countries in the oil production cut that went into effect on the first of May.

It noted and praised the additional cut in production by the Kingdom of Saudi Arabia by 1 Mb/d, Kuwait by 80 tb/d, and Oman by 10 to 15 tb/d in June. It also noted the voluntary adjustments from Norway and Canada, as well as various oil companies around the globe revising downward their production plans, given the unexpected uncertainty in the global oil market.

The conference also took note of developments in the global oil market since its last meeting in Vienna on 5th of March, 2020 and reviewed the oil market outlook for the remainder of 2020 and into 2021. It was agreed that the production adjustments in May and opening of economies by various countries through a gradual relaxation of lockdown measures due to the COVID-19 pandemic have contributed largely to the gradual recovery and return of stability to the market.

The conference considered the report of the Secretary-General, HE Mohammad Sanusi Barkindo, and the report of the Economic Commission, as well as other administrative issues. With global demand for oil projected to contract by about 9 Mb/d for 2020, continued commitment and intensified efforts by OPEC member countries and its allies will help to consolidate the recovery.

The conference enjoined all major oil producers to contribute proportionally to the stabilization of the market, and not let the compliance and efforts made by other OPEC members and non-OPEC participating countries to be in vain.

The conference expressed its grief over the news of the passing of the longest-serving member of the OPEC Board of Governors, Mr Hossein Kazempour,  Governor of OPEC for Iran.

Because of the current fundamentals, all member countries unanimously agreed on five key elements, which will be recommended to non-OPEC Participating Countries. They are:

1. Reconfirmation the existing arrangements under the April agreement.
2. Subscription to the concept of compensation by those countries who were unable to reach full conformity (100 per cent) in May and June, with a willingness to accommodate it in July, August and September, in addition to their already agreed production adjustment for such months.
3. Agreement to the option of extending the first phase of the production adjustments pertaining in May and June by one further month.
4. Recognition that the continuity of the current agreement is contingent on them fulfilling elements 1 and 2 above.
5. Agreement without dissent that the full and timely implementation of the agreement remains inviolable, based on the five key elements.

The agreement in (number 3) above means that the member countries all agreed to extend the first phase of the production cuts at the 10th Extraordinary OPEC and non-OPEC Ministerial Meeting by a month. The current cut, which went into effect on 1st of May, 2020 will now run until the 31st of July, 2020.

The next Ordinary Meeting will be held on 30th of November, 2020 in Vienna, Austria. The conference noted that September will mark the 60th Anniversary since the organization was founded in Baghdad in 1960.

Read the full report from the meeting here