Lagos — The Organization of the Petroleum Exporting Countries, OPEC has issued September 2021 as deadline for defaulting OPEC and non-OPEC countries participating in the ongoing production cuts to meet up with their compensation cuts.
The notice was issued following extension requests by participating countries at the last 15th and 16th Ministerial and non-Ministerial meeting.
A memo issued to participating countries obtained by SweetcrudeReports revealed that the ministers during the meeting stressed the importance of all countries achieving full conformity and making up for previous adjustment shortfalls during an extended compensation period, which runs through the end of September 2021.
Overall conformity to the production adjustments was put at 115 percent in March.
Participating countries on May 1, 2020, began adjusting production by 9.7m b/d as the global economy battled economic repercussions of the COVID-19 lockdowns and stringent health measures.
These adjustments amounted to nearly ten percent of pre-pandemic global demand.
They were subsequently amended, based on market conditions, beginning in August 2020 and January 2021, followed by the decision for additional gradual adjustments beginning on May 1, 2021.
Since the April 2020 meeting, OPEC and non-OPEC Participating Countries in the DoC had contributed to adjusting downward global oil supply by 2.6 billion barrels of oil by the end of February 2021, which has accelerated the rebalancing of the oil market.
As a result of participating countries defaulting in their cut quotas, OPEC said it had mandated them to submit plans for implementation of compensation for overproduced volumes to its Secretariat by 15 April 2021.
Affected countries now have four months to the end of the compliance extension.