OPEC requires overproduction member countries to comply with the agreement and compensate for cuts

Sinopec News Network News OPEC sources told Energy Intelligence this week that OPEC will once again remind those countries that have failed to comply with the OPEC + oil production reduction agreement to submit production reduction plans as soon as possible, explaining how to exceed quotas in recent months.

Since the latest agreement came into effect on May 1 last year, 10 oil-producing countries in the OPEC+ alliance have overproduction.

At the end of April, the OPEC+ ministerial meeting pointed out that all countries "commit to achieve full agreement and make up for the previous reduction in production during the extended compensation period.

However, OPEC stated that some countries “have not yet reached the minimum requirements for full compliance with the agreement to make up for the excess production.

Sources from the Organization of Petroleum Exporting Countries told Energy Intelligence that among these countries that have been slow to cut production, only Iraq, Equatorial Guinea and Gabon have submitted compensation plans, but Russia, Congo, Azerbaijan, Brunei, Kazakhstan, Sudan and None of South Sudan submitted.

According to "Energy Intelligence" estimates, in the year after the implementation of the OPEC + production reduction agreement, the output of OPEC member countries exceeded 120,000 barrels per day, while the output of non-OPEC member countries was only slightly higher than its total quota of 180,000 barrels.

According to "Energy Intelligence" data, Russia believes that meeting the 95%-96% production reduction standard is sufficient to balance the market.

Song Tieyi compiled from today's oil prices

OPEC Will Force Overproducing Members To Comply And Compensate

　　OPEC has had to remind once again the laggards in compliance in the OPEC+ oil production deal to submit plans on how they will compensate for pumping above their respective quotas in recent months, sources at OPEC told Energy Intelligence this week.

　　There are 10 producers in the OPEC+ alliance who have overproduced beyond their allowances since the latest pact became effective on May 1 last year.

　　At the latest ministerial meeting of OPEC+, the ministers noted at the end of April that all countries “pledged to achieve full conformity and make up for previous adjustment shortfalls during the extended compensation period, which runs through the end of September 2021, and stressed the importance of accelerating the market rebalancing efforts without delay.

　　The ministers, however, noted that some countries “have yet to achieve the minimum expectation of 100% conformity and to compensate for overproduced volumes,” OPEC said.

　　Among those laggards, Iraq, Equatorial Guinea, and Gabon have submitted plans for compensation schedules, but Russia, Congo, Azerbaijan, Brunei, Kazakhstan, Sudan, and South Sudan have not, OPEC sources told Energy Intelligence.

　　As per estimates by Energy Intelligence, in the year after the OPEC+ pact was implemented, OPEC members overproduced by 120,000 barrels per day (bpd), while non-OPEC members produced just over 180,000 bpd over their combined quotas.

　　According to Energy Intelligence's sources, Russia thinks that complying at around 95-96 percent is good enough.