Joint Ministerial Monitoring Committee (JMMC) of OPEC and partners, known as OPEC+, has agreed to 100 percent compliance with the cut deal, ruling out any immediate, additional increase in crude output, effectively rebuffing US President Donald Trump's calls for action to cool the market.
Following the ministerial meeting in Algiers, Oman's Oil Minister Mohammed al-Rumhy and his Kuwaiti counterpart Bakhit al-Rashidi told reporters after Sunday's talks that producers had agreed they needed to focus on reaching 100 percent compliance with production cuts agreed in June.
That effectively means compensating for falling Iranian production, however, Rumhy said the exact mechanism for doing so had not been discussed.
OPEC Secretary General Mohammad Barkindo said in his opening remarks that the past year had been a historic one for the Organization, as well as the global oil industry, with the historic ‘Declaration of Cooperation’ helping accelerate the return of balance to the global oil market, bringing more optimism to the industry, which in turn, has had a positive effect on the global economy and trade worldwide.
He added that the importance of these recent developments, specifically in terms of helping achieve sustainable market stability, is clearly vital across all time-frames.
"Stability today begets stability tomorrow, which is vital given that our industry remains a growth business, with oil continuing to be a fuel of choice for the foreseeable future," Barkindo stated.
Meanwhile, UAE Minister of Energy and Industry Suhail Mohamed al Mazrouei asserted that the industry is in a much healthier place than when the historic Algiers meeting took place on 28 September 2016.
The Minister explained that fundamentals are strong and “we have seen a return of a greater degree of balance to the market. OPEC and its non-OPEC partners have demonstrated what can be achieved when working together. I’d like to commend all participating countries for their historic efforts in this regard."
There is no doubt that this committee has played an important role in contributing to many successes, he indicated, adding that proper monitoring of conditions in the oil market is an essential component of transparent and effective work.
“The JMMC continues to fulfill its mandate commendably...Despite our major achievements towards market stability, we face new uncertainties today. Many of these uncertainties are factors beyond our control; nevertheless, they need to be continuously monitored in order to build on the progress made to date," he added.
Mazrouei called for continuing the discussions on further means of institutionalizing the cooperation.
For his part, Saudi Energy Minister, who is also Chairman of OPEC's JMMC, Khalid Falih stated that in the 10th meeting of the JMMC, the attendees discussed the excellent results achieved through collaboration between OPEC and non-OPEC countries.
“I reiterated the critical role oil plays in strengthening the global economy and our keen desire to cushion economies of developing nations,” he added.
The meeting also discussed current oil market conditions and future plans to extend the work of the JMMC to continue to monitor changing conditions in order to ensure sufficient supplies of oil to consumers, Falih indicated.
“Our attention is shifting to 2019. We have been briefed on the prospect of 2019 inventory builds which result from significant supply growth from non-member counties,” Falih said.
Falih said returning to 100 percent compliance was the main objective and should be achieved in the next two to three months, although he refrained from specifying how that could be done.
Meanwhile, Russian Energy Minister Alexander Novak said no immediate output increase was necessary, although he believed a trade war between China and the United States as well as US sanctions on Iran were creating new challenges for oil markets.
“Oil demand will be declining in the fourth quarter of this year and the first quarter of next year. So far, we have decided to stick to our June agreements,” Novak said.
He admitted there were a number of uncertainties regarding several issues, which can be seen in global economic markets.
“We will have to work very, very, very hard together in order to achieve the goals and ensure the implementation of our common arrangements in order to achieve equilibrium in the market," asserted the Russian minister.
