Saudi Arabia urges OPEC+ members to fulfill oil production cut commitments

Saudi Energy Minister Prince Abdul Aziz bin Salman on Monday stressed the Kingdom’s determination to rebalance global oil markets in the wake of the successful weekend meeting of members of the OPEC+ alliance.

“First and foremost, our purpose is to ensure the stability of the markets,” he told journalists at the first-ever virtual press conference of the Organization of the Petroleum Exporting Countries (OPEC) and its allies led by Russia.

But the prince warned that the progress already achieved in stabilizing oil supply and prices depended on all members of OPEC+ fulfilling their commitments to the cuts of 9.6 million barrels per day (bpd) agreed upon last April and extended for another month by the weekend meeting.

“There is no room for lack of conformity in the agreement. Producers who have failed to make the agreement will have to make up the cuts in July, August, and September. There is no stomach for laxity,” he added.

Iraq and Nigeria were the two main culprits in noncompliance, with Kazakhstan and Angola also selling more oil than they had pledged.

Prince Abdul Aziz said that progress toward meeting the new output levels would be strictly monitored by monthly sessions of OPEC+ energy ministers beginning in 10 days.

“I have no doubt Iraq will discharge its commitment to the letter. OPEC+ is about self-imposed and disciplined decision-making,” he said.

The Saudi minister said he would like to instill some of the techniques of central bank management into the monthly meetings of the Joint Ministerial Monitoring Committee, which will oversee compliance.

“Central bankers did a great job in the global financial crisis, and even now,” he added, singling out former US Federal Reserve chairman Alan Greenspan as “my hero.”

Saudi Arabia will halt the 1 million bpd in extra voluntary cuts it announced in May. “The voluntary cuts served their purpose and we are moving on,” the prince said.

Russian Energy Minister Alexander Novak, also present during the hour-long question and answer session with around 100 international journalists, said that global oil markets needed to find more balance. “Producers and consumers want recovery as fast as possible. The decision to extend the cuts was dictated by the need to see us through the most delicate period of recovery,” he added.

Novak agreed that full compliance was crucial to the OPEC+ deal. “The success of our efforts rest on all countries doing their part,” he said.

Despite the weekend deal and the upbeat tone of the OPEC+ event, global oil markets shed some of the gains of recent weeks, trading at $40.88 per barrel, down nearly 3 percent, by the close of European trading.

American investment bank Morgan Stanley warned of the danger of prices rising too fast, causing US shale production to pick up again.