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20 Apr 2018

Participating OPEC-non-OPEC Countries Achieve Highest Ever Conformity Level

The OPEC/Non-OPEC Joint Ministerial Monitoring Committee (JMMC) convened in Jeddah, the Kingdom of Saudi Arabia, for its eighth meeting, on 20 April 2018. It announced that, based on the Report of the Joint Technical Committee (JTC) for the month of March 2018, following successive months of record-breaking performances, OPEC and participating non-OPEC countries have achieved a conformity level of 149% with their voluntary production adjustments, the highest level so far.

The JMMC was established following OPEC’s 171st Conference Decision of 30 November 2016, and the subsequent Declaration of Cooperation made at the joint OPEC-Non-OPEC Producing Countries’ Ministerial Meeting held on 10 December 2016 at which 11 (now 10) non-OPEC oil producing countries cooperated with the 13 (now 14) OPEC Member Countries in a concerted effort to accelerate the stabilization of the global oil market through voluntary adjustments in total production of around 1.8 million barrels per day. The resulting Declaration, which came into effect on 1 January 2017, was for six months. The second joint OPEC-Non-OPEC Producing Countries’ Ministerial Meeting, held on 25 May 2017, decided to extend the voluntary production adjustments for another nine months commencing 1 July 2017. At the third joint OPEC-Non-OPEC Producing Countries’ Meeting, held on 30 November 2017, it was agreed to amend the Declaration of Cooperation so that it will take effect for the entirety of 2018.

Once again, participating countries have demonstrated unwavering dedication to achieving the rebalancing of the global oil market, as demonstrated by the high conformity level of 149%. Their collective efforts continue to yield positive results, with market fundamentals being solid. OECD commercial stock levels have been adjusted from a peak of 3.12 billion barrels in July 2016 to 2.83 billion barrels in March 2018, corresponding to a drop of 300 million barrels. Nevertheless, it was noted that the current commercial stocks remain above levels seen before the market downturn. The high conformity level has been validated by a diverse range of reporting agencies and media outlets.

The JMMC tasked the Secretariat to look into different metrics, with an in-depth analysis of addressing larger uncertainties in the market.

The JMMC urged all participating countries to remain focused on and, where necessary, intensify their efforts on the basis of the core principles of transparency, fairness and equity, which are central to the “Declaration of Cooperation.”

The JMMC noted assuring statements by Iraq, Kazakhstan, Libya and Venezuela and expressed its satisfaction with Iraq and Kazakhstan’s expression of support for further improving their conformity levels.

Given the ongoing transformative impact which the “Declaration of Cooperation” has on the global oil market, the JMMC will continue to think through further means of strengthening the Cooperation.

The JMMC also thanked His Excellency, Khalid A. Al-Falih, Minister of Energy, Industry and Mineral Resources of the Kingdom of Saudi Arabia and Chairman of the JMMC, for his gracious hospitality, as well as paying tribute to all involved from Saudi Arabia for the excellent arrangements for the meeting.

The next JMMC Meeting is scheduled to be held on 21 June 2018 at the OPEC Secretariat in Vienna, Austria.