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OPEC, non-OPEC countries agree on oil cut monitoring committee

Sunday, 22 January 2017 9:55 PM [ Last Update: Monday, 23 January 2017 12:42 AM ]

A flag with the Organization of the Petroleum Exporting Countries (OPEC) logo is seen before a news conference at OPEC's headquarters in Vienna, Austria, December 10, 2016. (Photo by Reuters)

OPEC members and other oil producing countries say a landmark deal to cut oil output is on track.

"The deal is a success ... All the countries are sticking to the deal ...(the) results are above expectations," said Russian Energy Minister Alexander Novak following the first meeting of a committee established to monitor the deal on Sunday.

Back in December, OPEC clinched a historic deal with Russia and other non-members to slash global production by nearly 1.8 million barrels a day for six months, starting January.

The cuts were introduced in an attempt to reduce a global slump in oil prices, which had been on the decline for nearly two years.

"Everyone sees that the agreements on oil production cuts have already have a positive effect on oil markets. The market has become more stable and predictable," added Novak.

After the meeting, oil ministers of participating countries noted that already 1.5 million barrels of the announced quota have been cut in the market.

“Compliance is great -- it’s been really fantastic,” said Saudi Energy Minister Khalid al-Falih. “Based on everything I know, I think it’s been one of the best agreements we’ve had for a long time,” he added.

"Despite demand usually being lower in the first quarter in winter, the actions taken by the Kingdom and many other countries has impacted the market in a tangible way and we have seen the impact in spot prices," he noted.

Monitoring Mechanism agreed upon

Following the meeting, Kuwaiti Oil Minister Essam Al-Marzouk announced that participants had agreed upon a monitoring mechanism and would not accept “anything less than 100 percent compliance” with the cuts.

He added that a technical joint committee (JTC) is to be established with a representative for each of the five members of the monitoring committee plus OPEC’s current president Saudi Arabia.

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