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On Thursday, Saudi Arabia’s energy minister pressured the OPEC oil cartel and its allies to fully comply with production cuts amid falling oil prices, insisting that doing so “is not an act of charity.” .
Last month, the ministers of OPEC nations and other major oil producers signed an agreement to cut production, underlining that only strict compliance could restore stability to prices that plummeted in the coronavirus pandemic.
But the cartel has criticized laggards, including Nigeria and Iraq, for overproducing and failing to implement their share of the cuts.
“Full compliance is not an act of charity,” Saudi Energy Minister Abdulaziz bin Salman said in a videoconference from the expanded OPEC + group of oil-producing nations.
“It is an integral part of our collective effort to maximize the interest and profits of each individual member of this group.”
The minister lashed out at the non-compliant members, saying they were bringing “damage to our reputation and credibility,” but without naming names.
“Tactics to overproduce and conceal non-compliance have been tried many times in the past and always end in failure,” said the minister, half-brother of Saudi Arabia’s de facto crown prince, Mohammed bin Salman.
“They are harmful not only to those who wear them, but to all of us.”
At a press conference after the ministerial meeting, the Saudi energy chief went on to tell OPEC + that “there is still work to be done and I urge everyone not to relax the efforts of the last three months.”
The cartel addressed the same issue in a statement in which it noted that despite “some signs of gradual improvement in market conditions … the pace of recovery appeared to be slower than anticipated with increasing risks of a prolonged wave of Covid-19 “.
Although more countries around the world are gradually coming out of the lockdown, crude consumption has not returned to pre-lockdown levels, which were already relatively low.
Under the terms of an agreement in April, OPEC and the so-called OPEC + pledged to reduce production by 9.7 million barrels per day (bpd) from May 1 to the end of June.
Then the cuts were to gradually moderate from July, to 7.7 million bpd through December.
But crude prices have stubbornly traded in a tight range for months, with US benchmark contracts West Texas Intermediate (WTI) and Europe’s North Sea Brent hovering around $ 40 a barrel.
The ministers agreed to extend until the end of the year the compensation period for countries that break their production quotas.
Brent crude and WTI maintained the two percent jump in market prices seen at the beginning of the meeting.
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