The\u00a020th Meeting of the Joint Ministerial Monitoring Committee (JMMC)\u00a0took place via videoconference on Wednesday,\u00a015 July 2020, under the Chairmanship of HRH Prince Abdul Aziz Bin Salman, Saudi Arabia\u2019s Minister of Energy, and co-Chair HE Alexander Novak, Minister of Energy of the Russian Federation.<\/p>\n
The Committee reviewed the monthly report prepared by its\u00a0Joint Technical Committee\u00a0(JTC) and developments in the global oil market since its last meeting on\u00a018 June 2020. The Committee also considered market prospects for the second half of\u00a02020.<\/p>\n
The Committee reiterated the importance of the\u00a0\u2018Declaration of Cooperation\u2019\u00a0(DoC) in supporting oil market stability. It recalled the historic decision taken by all Participating Countries in the DoC at the 10th (Extraordinary) OPEC and non-OPEC Ministerial Meeting on\u00a012 April 2020\u00a0to adjust downwards overall crude oil production, and the unanimous decisions taken at the\u00a0179th Meeting of the OPEC Conference\u00a0and the\u00a011th OPEC and non-OPEC Ministerial Meeting\u00a0on\u00a06 June 2020. The outcomes of the June Meetings extended the first phase of the\u00a0production\u00a0adjustments until\u00a031 July 2020; provided a compensation mechanism in respect of the months\u00a0July,\u00a0August\u00a0and\u00a0September\u00a0for participating countries that were not able to achieve full conformity in May and June; and endorsed monthly meetings of both the\u00a0JMMC\u00a0and the\u00a0JTC\u00a0to strengthen monitoring and to help provide a clearer understanding of market fundamentals.<\/p>\n
The Committee reviewed and reaffirmed the commitment of all\u00a0Participating Countries\u00a0to achieve full conformity and make up for any shortfall under\u00a0compensation plans\u00a0presented to the Committee.<\/p>\n
The Committee stressed that achieving\u00a0100 per cent\u00a0conformity from all participating Countries is not only fair, but vital for the ongoing rebalancing efforts and to help deliver long term oil market stability.<\/p>\n
The Committee reviewed the crude oil production data for the month of\u00a0June 2020\u00a0and welcomed the significant performance in the overall conformity level for participating OPEC and non-OPEC Countries at\u00a0107 per cent\u00a0in\u00a0June 2020, an achievement that found wide recognition in the market.<\/p>\n
It reiterated its appreciation of additional voluntary contributions made by Saudi Arabia, the United Arab Emirates and Kuwait in the month of\u00a0June 2020.<\/p>\n
The Committee noted that removing the credit for over-conformity results in a conformity level of\u00a095%\u00a0in\u00a0June 2020, the highest since the inception of the DoC in\u00a0January 2017.<\/p>\n
It requested the\u00a0JTC\u00a0and the\u00a0OPEC Secretariat\u00a0to closely monitor and report to the\u00a0JMMC\u00a0the implementation of the required compensation by the underperforming participating countries.<\/p>\n
It also requested underperforming participating countries to submit their plan for implementation of the required compensation for the month\u00a0June 2020\u00a0to the OPEC Secretariat by the end of\u00a0July 2020.<\/p>\n
The Committee welcomed the participation of Angola, Gabon, South Sudan and Congo, and noted that they had reiterated their commitment to the\u00a0DoC\u00a0production adjustments and compensation plans.<\/p>\n
The Committee observed that there were\u00a0encouraging signs of improvement\u00a0as economies around the world open up. While there could be localized or partial lockdowns re-imposed in some places, the recovery signs are clear, both in physical and futures markets.<\/p>\n
It noted that, moving to the next phase of the agreement, the\u00a0extra supply\u00a0resulting from the scheduled easing of the production adjustment will be consumed as\u00a0demand recovers.<\/p>\n
The\u00a0Committee\u00a0also noted that seasonality is more pronounced this year, due to the pandemic. For many DoC participants, there will be an increase in\u00a0demand for utilities, as well as changes in\u00a0travel patterns, boosting domestic demand for gasoline and diesel and as a result the impact on DoC participating countries\u2019 exports will be limited.<\/p>\n
In addition, the compensation schedule that has been agreed will mean that the\u00a0effective level of adjustments\u00a0will be deeper.<\/p>\n
The Committee thanked the JTC and the OPEC Secretariat for their work. The next meetings of the JTC and the JMMC are scheduled for\u00a017 August\u00a0and\u00a018 August 2020, respectively.<\/p>\n
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