OPEC+ responds to price drop, agrees to cut down oil production to 2mb/d
Amid falling price of the commodity, the Organisation of Petroleum Exporting Countries, OPEC+ has agreed to drop overall production of crude oil by 2 million barrels per day (2mb/d), from the August 2022 required production levels.
This will commence from November 2022 for OPEC and Non-OPEC Participating Countries.
This is contained in a statement published on the OPEC+ website following the 45th Meeting of the Joint Ministerial Monitoring Committee (JMMC) and the 33rd OPEC and Non-OPEC Ministerial Meeting which held at the OPEC Secretariat in Vienna, Austria, on Wednesday, 5 October 2022.
As part of resolutions at the meeting, the OPEC also agreed to reconfirm the baseline adjustment approved at the 19th OPEC and non-OPEC Ministerial Meeting.
The OPEC+ said the downward review of price comes as a result of uncertainty that surrounds the global economic and oil market outlooks.
Also, “the need to enhance the long-term guidance for the oil market, and in line with the successful approach of being proactive, and preemptive, which has been consistently adopted by OPEC and Non-OPEC Participating Countries in the Declaration of Cooperation.”
Participating Member Countries of the organisation also resolved 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 18 July 2021.
“Extend the duration of Declaration of Cooperation until the 31st of December 2023.”
Other resolutions at the meeting include: Adjust the frequency of the monthly meetings to become every two months for the Joint Ministerial Monitoring Committee (JMMC); Hold the OPEC and non-OPEC Ministerial Meeting (ONOMM) every 6 months in accordance with the ordinary OPEC scheduled conference; Grant the JMMC the authority to hold additional meetings, or to request an OPEC and non-OPEC Ministerial Meeting at any time to address market developments if necessary.”
Also, they resolved to; Extend the compensation period to the 31st of March 2023. Compensation plans should be submitted in accordance with the statement of the 15th OPEC and Non-OPEC Ministerial Meeting; Reiterate the critical importance of adhering to full conformity; Hold the 34th OPEC and Non-OPEC Ministerial Meeting on 4 December 2022.
