In a recent online meeting of the Joint Ministerial Monitoring Committee (JMMC), top OPEC+ ministers decided to maintain their current oil output policy. The meeting, which included representatives from the Organization of the Petroleum Exporting Countries (OPEC) and its allies led by Russia, confirmed that the planned unwinding of output cuts starting in October would proceed as scheduled. However, they emphasized that this increase could be paused or reversed depending on evolving market conditions.
Currently, OPEC+ is implementing a combined output cut of 5.86 million barrels per day (bpd), equivalent to approximately 5.7% of global demand. This strategy, initiated in 2022, was designed to stabilize the market amid uncertainties regarding global demand and increased supply from outside the group.
Following Thursday’s meeting, OPEC+ reiterated that the recent layer of cuts, which involves a 2.2 million bpd reduction until September, might be adjusted if necessary. The organization acknowledged that oil prices, which have decreased from a peak of over $92 a barrel in April to below $81, are under pressure due to demand concerns. However, recent tensions in the Middle East have provided some market support.
Russian Deputy Prime Minister Alexander Novak indicated that the current oil price levels are suitable for Russia and other market participants. He noted that the supply and demand balance remains stable and suggested that a partial increase in production could be considered starting in the fourth quarter if market conditions are favorable.
An OPEC+ source revealed that the group has a few weeks before making a final decision on the output hike planned for October. Algerian Energy Minister Mohamed Arkab expressed confidence that market uncertainties would diminish as long as supply remains adequate. He also anticipated a continued upward trend in oil demand in the coming weeks.
In June, OPEC+ had agreed to gradually unwind the 2.2 million bpd cut over the year from October 2024 to September 2025, while extending earlier reductions of 3.66 million bpd until the end of 2025. Saudi Arabian Energy Minister Prince Abdulaziz bin Salman had previously mentioned that OPEC+ could pause or reverse production increases if the market does not strengthen as expected.
Thursday’s meeting also addressed compliance issues, with assurances from Iraq, Kazakhstan, and Russia regarding their commitment to adhere to agreed output cuts. These countries had submitted plans to compensate for previous overproduction. The JMMC emphasized the need for all members to adhere to their compensation plans.
The JMMC, which includes oil ministers from Saudi Arabia, Russia, and other leading producers, typically convenes every two months to provide recommendations to the broader OPEC+ group. The next JMMC meeting is scheduled for October 2.
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