On July 31st local time, the OPEC+Joint Ministerial Monitoring Committee (JMMC) meeting maintained the oil output policy unchanged and maintained the tentative plan to resume production from the previous suspension starting next quarter. OPEC+has agreed to gradually resume production, which was suspended at the end of 2022 to boost oil prices, starting from October. The daily production in the fourth quarter will increase by about 540000 barrels.

OPEC+is a coalition of oil producing countries formed by the Organization of the Petroleum Exporting Countries (OPEC) and its allies, including Russia. The top ministers of the alliance held an online meeting on Thursday.

The current policy reached in June requires some OPEC+member countries to gradually cancel the production reduction of 2.2 million barrels per day from October 2024 to September 2025.

OPEC+stated in a statement that the member states implementing the reduction in oil production reiterated that they could suspend or reverse the plan to gradually cancel the voluntary reduction in oil production based on the market conditions at the time.

The oil price LCOc1 has fallen from a yearly high of over $92 per barrel in April to below $82, weighed down by concerns about demand intensity, but this week it has found support again from the increasingly tense situation in the Middle East.

Since the end of 2022, OPEC+has reached an agreement on a series of production cuts, with a total reduction of 5.86 million barrels per day, accounting for approximately 5.7% of global demand.

At the last meeting held in June, OPEC+agreed to extend the production reduction of 3.66 million barrels per day by one year until the end of 2025, and to extend the recent reduction of 2.2 million barrels per day by eight member countries by three months until the end of September 2024.

The latest statement shows that Thursday's meeting also recognized the commitments of Iraq, Kazakhstan, and Russia to fully comply with the production reduction agreement. These countries submitted plans earlier to make up for past production exceeding quotas.

An OPEC+source said that the chairman of the meeting insisted on member states making commitments to the compensation plan.

The JMMC is composed of oil ministers from Saudi Arabia, Russia, and other major oil producing countries, and typically meets every two months to make recommendations to the OPEC+alliance.

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