Saudi Arabia calls on OPEC partners to comply with production cuts
Rapapolvo for OPEC partners by Saudi Arabia. Saudi energy minister Abdul Aziz bin Salman has called on the organisation's members to be more rigorous in complying with the production cuts agreed to stabilise the oil market during a monitoring meeting on Thursday, according to Arab News. Only six countries have complied with August production levels. "Full compliance is not an act of charity. It is an integral part of our collective effort to maximise the interest and benefits of each individual member of this group. And compliance is a sovereign decision we have all made willingly and responsibly," he assured delegates at the virtual meeting this Thursday that he is monitoring the progress of the cuts on a monthly basis.
Abdul Aziz bin Salman, Saudi Arabia's energy minister, said it was essential that all 23 members of the organisation comply with the terms of the agreement. "Full compliance is not an act of charity. It is an integral part of the collective effort to maximize the interest and benefits of each individual member of this group. And compliance is a sovereign decision that we have all made willingly and responsibly," said the Saudi energy minister.
Saudi Arabia has been one of the partners that has made the most cuts during this time, while the Emirates, which has normally been one of the most compliant members, has not followed through on the cuts this time. However, the general level of compliance with the cuts was historically high in August. "We need to be transparent with the market. The whole world is watching us and we have to be rigorous," explained the Saudi energy minister. "Attempts to circumvent the market will not succeed," he said.
In a meeting with journalists, Suhail Al-Mazrouei affirmed his commitment to the OPEC cuts. "We have always been a transparent and full partner of all our colleagues in these deals," he said. Prince Abdul Aziz has assured that he intends to dispel any concerns that might exist about whether the oil cuts will be respected. The countries that have not complied, including the Emirates, have agreed to cut more oil in the future to compensate for past deficits, although Abdul Aziz has said that the compensation mechanism should not be used to encourage non-compliance and added that he would like the compensation mechanism to end this year.
Some analysts hoped that this OPEC meeting would agree to reverse some of the cuts introduced in April. "In the face of uncertainty, the market will look increasingly to us for direction. We must show that we are disciplined and fully committed to our agreement," Prince Abdul Aziz asked. "There is no other option or panacea. This is the only effective medicine to overcome these difficult times," he said.
Oil is going through one of its most difficult years in 2020. The pandemic has had a brutal impact on demand and consumption as a result of the paralysis of the world economy. In addition, the lack of agreement in March between OPEC members to cut production flooded the crude oil market at a time when it was not being consumed. Barrel prices began to register values not seen for 20 years. From May onwards, OPEC embarked on a policy of production cuts that has been historic. Although it was eased somewhat in June, OPEC members are still reluctant to increase production because of the uncertainty in the market due to the persistence of the pandemic in Europe and the United States.
