OPEC bulletin 11/17
Cooperation’. Eleven non-OPEC producers sat down
with OPEC Member Countries in the Austrian capital on
that day and agreed to a combined output reduction of
around 600,000 b/d.
This amount, added to the 1.2m b/d output reduc-
tion already decided upon by OPEC at its 171
Meeting of the Conference, meant that, from the begin-
ning of 2017, some 24 of the world’s oil producers would
implement joint reductions totalling nearly 1.8m b/d,
which would ease the oversupply in the market.
The ‘Declaration of Cooperation’
The supply glut, followed by a growing stock overhang,
had been pressuring the market and prices. The wel-
come OPEC/non-OPEC agreement marked a turning point
after months of discussion and deliberation, particularly
between OPEC and the Russian Federation.
The OPEC/non-OPEC Ministerial Meeting was jointly
chaired by Dr Mohammed Bin Saleh Al-Sada, President of
the OPEC Conference and Minister of Energy and Industry
of Qatar, and Alexander Novak, Minister of Energy of the
Assembledministers took into account the current oil
market conditions and short- to medium-term prospects
and recognized the need for joint cooperation of oil-ex-
porting countries, “to achieve lasting stability in the oil
market in the interest of oil producers and consumers.”
It also underscored the importance of other oil produc-
ing countries joining in efforts.
issued at the end of the meeting
importantly stressed that participants recalled the rights
of peoples and nations to permanent sovereignty over
their natural wealth and resources. It thus took into
account the desire of Azerbaijan, the Kingdomof Bahrain,
Brunei Darussalam, Equatorial Guinea, Kazakhstan,
Malaysia, Mexico, the Sultanate of Oman, the Russian
Federation, the Republic of Sudan, and the Republic of
South Sudan, as well as other non-OPEC producers, to
achieve oil market stability in the interest of all oil pro-
ducers and consumers.
Joint Ministerial Monitoring Committee
Along with the production reduction, the
added that three OPEC Members and two participat-
ing non-OPEC countries would join a Joint Ministerial
Monitoring Committee (JMMC), and they would be
assisted by the OPEC Secretariat.
It additionally stated that cooperation should be
strengthened, including through joint analyses and out-
looks, with a view to ensuring a sustainable oil market for
the benefit of producers and consumers, and that there
should be regular reviews at the technical andministerial
levels on the status of this cooperation, thus building a
framework for ongoing cooperation.
The JMMC’s first meeting was scheduled for January
22, 2017. To support the JMMC, a Joint Technical
Committee (JTC) was also formed, which is responsible
for preparing a monthly production data report on the
crude oil production of OPECMember Countries and par-
ticipating non-OPEC for use during the JMMC meetings.
In this way, the JMMC can provide some oversight as to
the levels of conformity to the production adjustments
that had been agreed upon.
To date, there have been five meetings of the JMMC,
with the fifth one taking place September 22, 2017, and
the sixth meeting scheduled for November 29, 2017.
Conformity levels to the production adjustments have
been consistently high throughout the year, reaching up
to and sometimes beyond 100 per cent. At the 5
of the Joint Ministerial Monitoring Committee in Vienna,
August reached a remarkable overall conformity level of
116 per cent. This has sent a strong positive message to
the market and investment has slowly started to come
At just over nine months into the ‘Declaration of
Cooperation’, the rebalancing process is well underway,
though it has not always been a smooth path. The cur-
rent oil market cycle first had to be contained and then
alleviated, which has required great perseverance. After
stemming the industry’s losses, momentumwas required
to move the market once again in a forward direction.
Implementation of a
1.8 million barrels/day
effective from January 1, 2017