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  • Oil Market Concerned about Glut in Coming Months: Owji

Oil Market Concerned about Glut in Coming Months: Owji

Iranian Minister of Petroleum Javad Owji underlined concerns about the possible consequences of the spread of coronavirus in some regions, especially China, for the economic growth of the world and the possible demand destruction, saying: “There are concerns about the possibility of a glut in the oil market in the coming months.”

Speaking on Sunday, after the 185th meeting of the Organization of the Petroleum Exporting Countries (OPEC) and the 34th OPEC+ ministerial meeting, which was held today in the form of a video conference, Mr. Owji said: “Firstly, both meetings were supposed to be held in person at OPEC secretariat in Vienna, and according to some considerations and decisions, both meetings were held virtually.”

He stated that the most important agenda of this meeting was the evaluation of the latest developments in the global oil market and the status of implementation of previous OPEC+ decisions, and continued: “According to the decision of the 33rd OPEC+ meeting, it was decided that the total production of the coalition member countries would decrease by 2 million barrels per day from November 2022.

In this meeting, he said, it was again decided to continue the reduction until the end of 2023, following the assessment of the conditions and according to the reports provided by the ministerial committee for monitoring the OPEC+ agreement.

Owji noted: “Due to some concerns about the possible consequences of the spread of coronavirus in some regions, especially China, for the economic growth of the world and possible damage to demand, there are concerns about the possibility of excess supply of oil in the coming months; in today's meeting, it was emphasized again that the OPEC+ countries are carefully monitoring the conditions of the global oil market and the balance of supply and demand, and that there is a readiness to quickly take the necessary decisions and actions based on the conditions of the oil markets.”

He said: “In the current situation, OPEC+ producers are at a favorable point in terms of unity, cooperation and understanding among themselves, and our effort is to institutionalize cooperation with non-OPEC producers within the framework of OPEC+, therefore, any decision taken at the OPEC+ meeting will definitely be based on consensus among all producers.”

The Iranian Minister of Petroleum stated: “According to the published reports and analyses, there are serious uncertainties on both sides of global oil supply and demand, each of which can have its own consequences for the outlook of future developments. What can be stated for sure is that OPEC+ closely and regularly monitors the developments of the world oil market and the factors affecting it and, like the experiences of the past years, appropriate decisions are made at the required time to establish and maintain stability in the world market.”

Mr. Owji added: “The 185th meeting of the OPEC conference was held yesterday as well, and according to the usual routine, the items on the agenda of the OPEC conference meeting included a set of administrative, financial and management issues related to the OPEC organization, which are usually held twice a year at the level of oil and energy ministers of OPEC member countries; in the December 3 meeting, many administrative, financial and management issues were raised and reported by the OPEC secretariat.”

Statement of 34th OPEC and non-OPEC Ministerial Meeting

The 34th OPEC and non-OPEC Ministerial Meeting took place by videoconference on Sunday, 4 December 2022.

In line with the decision of the OPEC and non-OPEC Participating Countries in the Declaration of Cooperation at the 33rd OPEC and non-OPEC Ministerial Meeting on 5 October 2022, which was purely driven by market considerations and recognized in retrospect by the market participants to have been the necessary and the right course of action towards stabilizing global oil markets; and adhering to the approach of being proactive and pre-emptive, the Participating Countries reiterated their readiness to meet at any time and take immediate additional measures to address market developments and support the balance of the oil market and its stability if necessary.

The Participating Countries decided to:

Reaffirm the decision of the 10th OPEC and non-OPEC Ministerial Meeting on 12 April 2020 and further endorsed in subsequent meetings, including the 19th OPEC and non-OPEC Ministerial Meeting on 18 July 2021 and the 33rd OPEC and non-OPEC Ministerial Meeting on 5 October 2022, including the adjustment of the frequency of the monthly meetings to become every two months for the Joint Ministerial Monitoring Committee (JMMC) and the authority of the JMMC to hold additional meetings, or to request an OPEC and non-OPEC Ministerial Meeting at any time to address market developments if necessary.

Reiterate the critical importance of adhering to full conformity and compensation mechanism taking advantage of the extension approved on the 33rd OPEC and non-OPEC Ministerial Meeting.

Hold the 35th OPEC and non-OPEC Ministerial Meeting on 4 June 2023.

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