OPEC+ countries will determine the parameters of their agreement for the period after September

MOSCOW, September 5 – PRIME. On September 5, OPEC+ countries will discuss the situation on the oil market via videoconference and determine the parameters of their oil agreement for the period after September.

Members of the OPEC+ Ministerial Monitoring Committee will be the first to meet at 14.00 Moscow time, who will make a recommendation on further parameters of the agreement. Then the final decision will be made at a meeting of all heads of OPEC + delegations, which is scheduled for 14.30 Moscow time.

OPEC+ cut oil production by 9.7 million barrels per day in May 2020 due to falling demand for oil caused by the widespread fight against covid. Then the terms of the agreement were repeatedly adjusted. So, since August, the alliance has moved to the final stage of exiting the cuts announced two years ago, and in September it will increase production by 100,000 barrels per day.

The current OPEC+ agreement is valid until the end of the year. At the same time, earlier in August, Saudi Energy Minister Prince Abdulaziz bin Salman said that the alliance would soon begin work on a new oil agreement for the period after 2022. He also noted the discrepancies that exist in the dynamics of the physical and “paper” (exchange) markets, saying that the alliance, as before, has all the necessary leverage to influence volatility, including production cuts.

The statements of the Saudi minister on September 1 were supported by Russian Deputy Prime Minister Alexander Novak. He said that Russia supports the continuation of the OPEC + deal after 2022 and this issue will be discussed by the alliance in the fall. He also said that he agreed with bin Salman’s position that the oil futures market is divorced from the real one and destabilized by sanctions factors.

However, whether the alliance will discuss oil production cuts in October is probably too early to say. Reuters reported on September 2, citing sources, that OPEC+ would keep the parameters of the agreement for October unchanged, although some of the agency’s interlocutors still do not rule out a reduction in production to support prices.

As for the deadline for making a decision – for a month or until the end of the year, Novak said that the practice of setting parameters on a monthly basis justifies itself. “At least for October. As countries will offer,” he reported.