A committee monitoring the OPEC-led effort to balance the oil market will examine compliance next week, Kuwait's oil minister said. Photo by Pepj/Shutterstock
July 21 (UPI) -- Parties to the OPEC-led effort to ease the glut of oil on the market through production declines will examine compliance next week, Kuwait's oil minister said.
Kuwait chairs a committee of members of the Organization of Petroleum Exporting Countries and non-member states monitoring the impact of an agreement implemented in January. Parties to the agreement opted to sideline 1.8 million barrels of oil per day and counts on cooperation from key non-OPEC members like Russia.
Crude oil prices are about 10 percent less than where they started the year, despite Thursday's brief rise above the $50 per barrel mark. With markets still under supply-side pressures, Kuwaiti Oil Minister Essam al-Marzouq said the committee would meet next week to review who's doing their fair share.
"Oil ministers of OPEC and non-OPEC producers are set to meet in St. Petersburg, Russia, on Monday to assess conformity with a recent output cut resolution," he told the official Kuwait News Agency, known also as KUNA.
In terms of actual compliance, the OPEC members are collectively doing more than required because seven of the member states, led by Saudi Arabia, are cutting more than outlined in the initial agreement.
In terms of production, however, the addition of Equatorial Guinea as a member state and increases from Libya and Nigeria, two OPEC members exempt from the deal, means combined OPEC production is 600,000 barrels per day above the threshold.
Libya and Nigeria are exempt from the agreement so they can steer oil revenue toward national security efforts. Iran, meanwhile, is the only member state given a free pass on production so it can try to regain a market share lost to sanctions.
Libya and Nigeria alone added about a quarter million barrels of oil per day to the market, while six member states, including Kuwait, posted output declines in June
The monitoring committee in March agreed to extend the agreement by three months into early 2018. That frustrated investors looking for deeper cuts.