Opening Remarks by the Chairman of the JMMC

Delivered by HE Issam A. Almarzooq, Kuwait’s Minister of Oil and Minister of Electricity and Water, and Chairman of the Joint Ministerial Monitoring Committee (JMMC), at the 5^th Meeting of the JMMC, 22 September 2017, Vienna, Austria.

Your Excellencies, ladies and gentlemen,
Good morning.

It is my pleasure to welcome you all to the OPEC Secretariat for the fifth meeting of the Joint Ministerial Monitoring Committee (JMMC).

I would especially like to recognize and warmly welcome several esteemed gentlemen who join us here for the first time.

Firstly, I would like to congratulate His Excellency Eng. Eulogio Del Pino on his recent appointment as People’s Minister of Petroleum of the Bolivarian Republic of Venezuela, and welcome him to the panel of Ministers of the JMMC.

Our gratitude and sincere thanks goes to his predecessor, His Excellency Dr. Nelson Martínez, who contributed greatly to past meetings of the JMMC.

I would also like to welcome His Excellency Dr. Emmanuel Ibe Kachikwu, Nigeria’s Minister of State for Petroleum Resources, His Excellency Mustafa A. Bulgasm Sanalla, Chairman of Libya’s NOC, and Alaa K. Alyasri, the new General Director of Iraq’s SOMO, who is attending this meeting on behalf of his Oil Minister, His Excellency Jabbar Ali Hussein Al-Luiebi.  We look forward to hearing their views on developments and plans in their home countries, as well as at the global level.

It is also an opportune to once again thank the unflagging efforts of the Joint Technical Committee, ably and expertly supported by the OPEC Secretariat, whose input is so important to the process of the ‘Declaration of Cooperation’. The JTC group met for the eighth time just two days ago, and today we will review their analysis and recommendations.  I would like to say to them, please keep up the great work.

Excellencies, ladies and gentlemen,

Since our last meeting in the beautiful city of St. Petersburg in July, the oil market situation has markedly improved.  The market is now evidently well on its way toward rebalancing.  There are a number of positives to report.

The destocking process has accelerated in recent months.  The most recent data for August 2017 now shows OECD commercial oil inventories around 170 million barrels above the five-year average.  This compares to the beginning of 2017, when the level was 340 million barrels above the five-year average. Moreover, floating storage has declined significantly in recent months.

I should add here that the catastrophic hurricanes that have hit the US Gulf Coast in recent weeks and the subsequent refinery outages have evidently had some short-term repercussions with risings US stock levels.  However, the US energy industry already appears to be rebounding quickly.  We offer them, and everyone impacted by the devastating events, our full support as the region recovers.

We have also witnessed a distinct change in the market structure over the past couple of months, initially with a narrowing contango and more recently when Brent flipped into backwardation.  This we believe is a sign of the shrinking stockpiles, as well as stronger demand.

In fact, the OPEC Secretariat in its most recent Monthly Oil Market Report raised expectations for oil demand in both 2017 and 2018.  In addition, only last week the International Energy Agency also increased its estimate for demand growth in 2017 by 100,000 barrels a day.

In addition, it is important to note that we saw a slight deceleration in expected 2018 non-OPEC supply growth in OPEC’s latest monthly report.

Alongside these developments we should also place the continuing and unprecedented high conformity levels achieved by the participating OPEC and non-OPEC countries to the ‘Declaration of Cooperation’.

However, we should not take these developments as a sign to sit back and relax.  While we are on the right track and there is a now more light at the end of the tunnel, this is not the time to take our foot off the accelerator.  We have more work to do in lowering inventories toward the last five-year average and help return sustainable stability to the market.  We cannot be complacent.  We cannot lose sight of our key aspirations.

For all of us here today, this means reviewing recent oil market developments, assessing conformity levels, both collectively and individually, and looking at ways and means to continually improve these levels and the market rebalancing process in the months ahead.

I think it is important for me to again highlight that some producing countries continue to over-perform, and we should recognize their dedicated and exemplary efforts.  What this also underscores is how vital it is for each and every county to reach its own conformity goals.  We should be resolute in achieving 100 per cent across the board.

Excellencies, ladies and gentlemen,

This Committee has great responsibility, and with this in mind, I am happy to have a very wise man next to me as Alternate Chairman, His Excellency Alexander Novak.  His support and guidance at every JMMC meeting has been greatly appreciated.

We should remember that our actions are being watched closely.  We need to remain steadfast and resolute in seeing through this market rebalancing process, in the interests of both producers and consumers, and the global economy as a whole.  It is vital in helping to ensure a stable and secure energy future.

Thank you for your attention.