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Opec-Plus Stays Course Despite New Headwinds

Copyright © 2021 Energy Intelligence Group
Geopolitics: Opec's Fraying Cohesion

Opec-plus ministers quickly brushed off demand concerns to green-light their previously scheduled 400,000 barrel per day monthly increases to oil supply. In sharp contrast to July’s high-octane marathon talks, this week's Opec-plus meeting was short, sweet and utterly lacking in drama (PIW Jul.23’21). For the moment, producers can bask in the twin blessings of buoyant prices and rising production. But they cannot afford complacency, with extreme uncertainly on both demand and supply fronts looming toward the end of the year and into 2022. “There is consensus. There are no concerns,” one delegate noted ahead of the meeting. That proved true. Discussions concluded after little more than an hour, with the group pegging July compliance at a healthy 109%, while also stressing the “critical importance of adhering to full [output] conformity.” The period in which members can make catch-up cuts to compensate for previous over-production has been extended to December. Ministers agreed to next meet on Oct. 4.

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