The Organization of the Petroleum Exporting Countries (OPEC) and non-OPEC countries have decided to increase oil production by 500,000 barrels per day (bpd).
At the 12th OPEC and non-OPEC Ministerial Meeting (ONOMM) held via video conference, the countries have agreed to increase the oil production effective from January 2021.
In a press statement, Opec said: “In light of the current oil market fundamentals and the outlook for 2021, the Meeting agreed to reconfirm the existing commitment under the DoC (Declaration of Cooperation) decision from 12 April 2020, then amended in June and September 2020, to gradually return 2 mb/d, given consideration to market conditions.”
Additionally, the participating countries of the DoC have agreed to assess market conditions by holding monthly OPEC and non-OPEC ministerial meetings starting in 2021.
Upon assessing, the countries will decide on further adjustments for oil production for the following month with monthly adjustments set not more than 0.5 million barrels per day (mb/d).
The DoC participating countries have decided to voluntary adjust production by 0.5 mb/d from 7.7 mb/d to 7.2 mb/d, starting in January 2021.
In the meeting, the countries have also agreed to extend the compensation period established from the 11th ONOMM until the end of March 2021 to ensure full compensation from the DoC countries of over production in previous months.
Opec said in a statement: “Looking ahead, the Meeting emphasised that it was vital that DoC participants, and all major producers, remain fully committed to efforts aimed at balancing and stabilising the market.
“It noted that renewed lockdowns, due to more stringent COVID-19 containment measures, continue to impact the global economy and oil demand recovery, with prevailing uncertainties over the winter months.”
The latest meeting follows the decision made by OPEC + in October 2020 to support the oil market amid weak demand due to a second wave of the coronavirus.