Saudi Arabia, OPEC’s biggest oil producer, plans to step up pressure on nations that aren’t complying with their commitment to cut output, including a proposal to start monitoring exports.
“Some countries continue to lag” in their compliance, Saudi Oil Minister Khalid Al-Falih said Monday in St. Petersburg, Russia, where he’s attending a meeting of OPEC and non-OPEC producers. It’s “a concern we must address head on.”
OPEC’s supply in July will be the highest this year, data from tanker-tracker Petro-Logistics SA show. The group’s compliance with its November deal to curtail output dropped to 92 percent in June from 110 percent in May, according to a person familiar with the data.
The Organization of Petroleum Exporting Countries and its partners, including Russia, agreed late last year to cut output by as much as 1.8 million barrels a day to drain bloated global stockpiles. The curbs apply to production rather than exports, and the reported compliance with the deal hasn’t been matched by shipments, according to Al-Falih.
“Exports have now become the key metric for financial markets, and we need to find a way to reconcile credible export data with production data in our monitoring,” the minister said.
Three people with knowledge of the talks said Monday that OPEC and non-OPEC’s joint ministerial committee will consider recommending that crude exports be monitored along with production figures, a proposal originally presented by Kuwait in January.
Oil slumped into a bear market last month and benchmark Brent crude is trading at about $48 a barrel, a gain of less than $2 since the cuts were agreed on last year. The efforts of OPEC and its allies have been undermined by increased supply from U.S. shale drillers and from Libya and Nigeria, which are restoring output lost to internal strife.
“We remain supportive of our brothers and partners in both those nations” as they recover, Al-Falih said. Nevertheless, OPEC “should monitor the impact of such growth in supply on global supply-demand balances.”
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