OPEC+ monitoring committee ministers begin discussing oil production plan for June

The meeting of the OPEC+ ministerial monitoring committee, which is scheduled to discuss a plan to restore oil production in June, began via videoconference, Report informs referring to TASS.

“The meeting has begun,” a source familiar with the negotiations said. At the meeting, the ministers are to discuss the level of recovery in oil production for the next month. Since August 2021, the allies have been increasing oil production by 400,000 barrels per day per month, however, at the last ministerial meeting on March 31, the plan was slightly updated - from May 2022, OPEC+ countries will increase daily production by 432,000 barrels per month.

The OPEC+ monitoring committee includes eight countries out of 23 participating in the OPEC+ agreement. These are Russia, Saudi Arabia, the UAE, Iraq, Kuwait, Algeria, Venezuela and Kazakhstan. Ministers will consider a report on the oil market prepared by the OPEC+ technical committee, which also met via videoconference on May 4.

According to the report of the technical committee, the oil market in 2022 will be in a state of oversupply. The surplus is estimated at an average of 1.9 million barrels per day for the year, and in May this figure may reach the highest value - 3.7 million. At the same time, the technical panel worsened the forecast for oil demand growth in 2022 by 500,000 barrels per day, to 3.7 million, which in absolute terms means a daily consumption of 100.5 million barrels.

OPEC Secretary-General Mohammad Barkindo during a meeting of the technical committee explained that the deterioration in the assessment is associated with a lower forecast for global economic growth.

If the OPEC+ monitoring comes to a consensus and makes a recommendation on production levels for June, it will only be fixed at the OPEC+ ministerial meeting, which will begin immediately after the meeting of the monitoring committee. If the plan to restore daily oil production by 432,000 barrels in June is maintained, the OPEC+ countries will reduce production by only 1.297 million, and not by 9.5 million, as in May 2020.