EghtesadOnline: OPEC and its partners will fulfill their implementation of a deal to cut output, having already announced 60 to 70 percent of the promised curbs, Kuwait said.
Countries including Saudi Arabia, the United Arab Emirates, Russia, Kuwait, Qatar and Iraq have announced cutbacks that account for the bulk of the deal reached last year, Kuwaiti Oil Minister Essam Al-Marzouk said Monday. Full implementation won’t be immediate, but rather a “process” carried out in the coming six months, according to the minister, who is chairing the committee to oversee compliance with the accord, according to Bloomberg.
“We are very confident that the remaining countries will abide by the cuts,” Al Marzouk said at a press conference with OPEC Secretary-General Mohammad Barkindo. “We expect there will be a large degree of compliance especially because the rise in oil prices proved the importance of compliance.”
The Organization of Petroleum Exporting Countries and 11 other producers including Russia agreed on Dec. 10 to jointly cut output by about 1.8 million barrels a day in an effort to end a three-year oil surplus, which sent prices spiraling and battered the economies of producing nations around the world. The last time OPEC cut output, 70 percent was the maximum level of compliance among members, according to the group’s former head of research.
Brent crude, which capped its biggest annual gain last year since 2009, added 5 cents to $54.99 a barrel at 2:03 p.m. Singapore time on Tuesday.
Some of the countries involved in the accord are allowed to make sure their average output is lower on average through the first half, rather than cut immediately from Jan. 1, Al Marzouk said. The five-nation committee established to oversee adherence to the pact will have its first meeting in Vienna on Jan. 21 to 22.
“The cuts don’t have to start from the beginning of January, it will be an average over the next six months,” said Al Marzouk. “Even if the reductions aren’t complete, this will be the start of compliance.”
Kuwait repeated its recommendation the group should monitor export levels, and not just production, to ensure compliance. Three or four companies are being considered to help with this, he said.