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OPEC to assign new oil production quota
August 25, 2018, 4:00 pm
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The Joint Ministerial Committee on Compliance (JMCC), formed by the Organization of Petroleum Exporting Countries (OPEC) and several non-OPEC oil-exporters to monitor adherence by member states to the historical oil production-cut agreement signed by them in November 2016, is slated to meet in Algeria on 23 September.

The JMMC will review compliance to assigned production quotas and discuss new mechanisms on production volumes of member states when they meet in Algeria with the aim of reaching an agreement before the end of the year, said Kuwait’s Oil Minister Bakhit Al- Rashidi last week.

“The production numbers of OPEC and countries outside OPEC will be reviewed at the meeting in Algeria, and before the end of the current year, there will be an agreement on a mechanism to monitor output next year,” he said. Oil markets should “remain stable” until the end of the year, he added.

After nearly 18 months of consistent production cuts by OPEC and its allies to deplete the supply glut in the oil market and raise oil prices, the members agreed at their meeting in Vienna in July to selectively increase production.

Announcing the production hike agreement in Vienna, Saudi Arabia’s oil minister Khalid Al-Falih said the deal would allow countries able to produce more to meet the group’s overall conformity level.The agreement effectively meant that a handful of countries, including Russia, Saudi Arabia, the UAE and Kuwait, would be allowed to increase their production volumes to make up for the production shortfalls in countries such as Venezuela, Nigeria, Angola, and possibly Iran if its exports were adversely affected by the US sanctions to be implemented from November of this year.

The JMMC is chaired by Saudi Arabia and includes OPEC members Algeria, Kuwait, the UAE and Venezuela, as well as non-OPEC members Oman and Russia. The JMMC has invited Iran to attend the meeting in Algiers to defend its market share, which could face headwinds from the US sanctions. For its part, Iran has criticized the decision in July by OPEC and its allies to boost output above agreed targeted levels.

 

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