By Tsvetana Paraskova for Oilprice.com – Apr 03, 2023
.The Joint Ministerial Monitoring Committee met on Monday and confirmed the 1.66 million bpd production cut that was announced on Sunday.
Oil prices were more than 6.5% higher on Monday morning, with WTI breaking above $80 and Brent close to $85.
OPEC claimed the measure was precautionary and designed to ensure stability in oil markets.
New York, April 3, 2023 -The Joint Ministerial Monitoring Committee (JMMC) of the OPEC+ group met on Monday and made the shocking new production cuts official with some of the major producers in OPEC and non-OPEC including Russia pledging a total of 1.66 million barrels per day (bpd) of cuts on top of the ones running since November last year.
The meeting, which, just days before, was expected to be a routine no-news affair, was only routine in acknowledging the cuts announced on Sunday, which sent oil prices rallying by more than 6% early on Monday with WTI Crude topping $80 a barrel again.
The meeting noted the voluntary production adjustment announced on Sunday by Saudi Arabia (500,000 bpd); Iraq (211,000 bpd); United Arab Emirates (144,000 bpd); Kuwait (128,000 bpd); Kazakhstan (78,000 bpd); Algeria (48,000 bpd); Oman (40,000 bpd); and Gabon (8,000 bpd) starting May until the end of 2023.
Other OPEC+ producers are also being encouraged to join the voluntary cuts, Amena Bakr, Chief Opec Correspondent & Deputy Bureau Chief at Energy Intelligence, reported.
The latest cuts come on top of the two million bpd cut announced in October 2022 until the end of this year and in addition to Russia’s announcement on Sunday that it would extend its 500,000 bpd cut to the end of 2023.
Russia’s Deputy Prime Minister Alexander Novak said that Russia would cut 500,000 bpd through the end of 2023 to ensure predictability in the global oil market in a period of high volatility and unpredictability due to the ongoing banking crisis in the U.S. and Europe, the global economic uncertainty, and “unpredictable and short-sighted energy policy decisions.”
OPEC said on Monday that the JMMC meeting “noted that this is a precautionary measure aimed at supporting the stability of the oil market,” using the same wording as Saudi Arabia did in its own announcement on Sunday.
The latest cuts signal that OPEC and OPEC+ are now firmly back in control of the global oil market.
