As a result, the overall cuts in production of participants in the OPEC+ agreement in January 2021 will amount to 7.2 million bpd compared to the base level of production.
The reasons behind such a cautious outcome lie in the varied tends prevailing on markets.
On the one hand, there is at last clarity In the United States in terms of the presidential election, new vaccines are now appearing in the face of COVID and the “second wave” of the pandemic is causing fewer negative effects on markets.
On the other hand, the current level of demand for oil – which stands at 9 million bpd – is lower than the pre-crisis level and the stability and balance established on markets are very fragile at best.
That situation led to a failure to achieve a united position among OPEC+ participants.
Long and serious debates dogged attempts to find a resolution.
At the outset, the OPEC+ monitoring committee declined to make any recommendation about the future of the agreement in place before the ministerial meeting. Then, the meeting itself was postponed from 1st to 3rd December.
At the same time, the Saudi Energy Minister, Prince Abdulaziz bin Salman, declined to act as co-chairman of the meeting and proposed that his place be taken by the Energy Minister of the United Arab Emirates, Suhail Al Mazrouei. But he also declined.
In the course of events, Russian Deputy Prime Minister Alexander Novak assumed the duties of co-chairman on his own. The prince later took his place in the presidium.
After several hours of debate, a compromise decision was reached: increase oil production, but only by 500,000 bpd and to hold monthly meetings to monitor the situation.
“We came to an agreement and came up not with 5.8 million bpd, but rather 7.2 million bpd, a little bit higher. The aim was to avoid bringing down the market, to avoid bringing down the balance which is now In place,” Novak told Rossiya-24 television after the conclusion of discussions. “A compromise was found after a discussion. There was quite a broad exchange of views. The compromise shows that through cautious, even steps, we are gradually restoring production to the level set down by the agreement. I hope that this will take place over the (next) quarter – from adding 500,000 bpd we will get to 2 million bpd by April if there are no force majeure circumstances.”