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Iranian Minister of Oil Bijan Zanganeh said that the crude oil output cuts will decrease from previously-agreed amount of 7.7 million bpd to 7.2 million bpd in January 2021, down 500,000 bpd, adding it was a wise decision.
Zangeneh made the remark after the 12th OPEC and non-OPEC Ministerial Meeting held on Thursday, adding OPEC+ meetings need to be held monthly to decide on the curbs for other months.
However, if further easing was needed, it should not be more than 500,000 barrels per day, he said, emphasizing the decision for future months would depend on crude oil supply and demand in the market.
Due to the uncertainty in the market, the monthly meeting could help to maintain market stability and support OPEC and non-OPEC’s objective to create a fair price in the market.
I do not think the decision will have an influential effect on the market in terms of decreasing the prices as producing 500,000 barrels is not a big amount.
The 12th OPEC and non-OPEC Ministerial Meeting ended on Thursday with members reaching a consensus on easing crude oil output cuts by 500,000 bpd for January 2021.
Also, the decision on the amount of easing crude oil cuts in the future months will be made based on the global oil markets condition during a meeting due to be held by the group every month.
According to the group, the collective crude oil output cuts by OPEC+ members will decrease from 7.7 million bpd to 7.2 million bpd in January 2021, down by 500,000 barrels. This will continue until the total increase reaches 2 million bpd.
Meanwhile, those countries that did not fully comply with the agreement have to compensate for the amount by March 2021.
OPEC and its allies will comply with 7.7 million bpd of production curbs in December.
Iran, Venezuela and Libya are exempt from any cuts.
