The OPEC group and its allies decided to boost production in September at a slower pace than in previous months.
The 31st OPEC and non-OPEC ministerial meeting, held on Wednesday, highlighted with particular concern that insufficient investment into the upstream sector will impact the availability of adequate supply in a timely manner to meet growing demand beyond 2023 from non-participating non-OPEC oil producing countries, some OPEC countries and participating non-OPEC oil producing countries.
“The chronic underinvestment in the oil sector has reduced excess capacities along the value chain (upstream- midstream- downstream),” a statement after the meeting read.
The OPEC+ coalition said it will increase output to 100,000 barrels a day (bpd) in September after raising it by 648,000 barrels per day in July and August.
The group considered what effects staggering inflation and rising COVID
-19 rates may have on global demand for fuel in the fall, with gasoline prices at the pump still high.
The meeting noted the dynamic and rapidly evolving oil market fundamentals, necessitating continuous assessment of market conditions. The ministers also drew attention to the severely limited availability of excess capacity, saying that this necessitates utilizing it with great caution in response to severe supply disruptions.
The virtual meeting pointed out that preliminary data for OECD commercial oil stocks level stand at 2,712 mb in June 2022, which was 163 mb lower than the same period last year, and 236 mb below the 2015-2019 average, and that emergency oil stocks have reached their lowest levels in more than 30 years.
The meeting also noted that DoC conformity averaged 130 percent since May 2020, supported by voluntary contributions of some participating countries.
The OPEC+ coalition reaffirmed the decision of the 10th OPEC and non-OPEC ministerial meeting, held on 12th April 2020, and further endorsed in subsequent meetings including the 19th OPEC and non-OPEC ministerial meeting on July 18, 2021.
They decided to adjust upward the production level for OPEC and non-OPEC participating countries by 0.1 mbd for the month of September 2022 as per the attached table. This adjustment does not affect the baselines agreed on in the above-mentioned decision on 18th July 2021.
The countries reiterated the critical importance of adhering to full conformity and to the compensation mechanism. Compensation plans should be submitted in accordance with the statement of the 15th OPEC and non-OPEC Ministerial Meeting.
The meeting decided to hold the 32nd OPEC and non-OPEC Ministerial Meeting on 5th September 2022.