Opec member countries ended a seven-hour meeting today with a production restraint deal, the details of which remain to be agreed upon with non-Opec allies tomorrow.
"We are in agreement," Kuwaiti oil minister Khaled al-Fadhel said. "We've agreed on what was discussed on the agenda."
Iranian oil minister Bijan Namdar Zanganeh echoed the sentiment. "We have an agreement," he said. "Tomorrow morning, we will finalise."
Opec delegates said that the undisclosed deal would not be implemented if their non-Opec counterparts do not endorse it tomorrow.
Earlier, the Joint Monitoring Ministerial Committee (JMMC) that oversees the compliance of Opec and non-Opec countries — collectively known as Opec+ — had put forward a recommendation to slash a further 497,000 b/d of production. This would be in addition to the existing 1.2mn b/d cut covered by the Opec+ production deal that is due to expire at the end of March.
The Opec meeting, which started at around 4pm Vienna time, extended well into the night. A press conference scheduled by Opec secretary-general Mohammed Barkindo and outgoing Opec president and Venezuelan oil minister Manuel Salvador Quevedo to announce the results of the meeting was cancelled.
Prince Abdulaziz bin Salman, who represents Opec's de factor leader Saudi Arabia as oil minister, would not be drawn into commenting on the outcome of the meeting.
Opec not only needed to agree to the proposed cut, but also on how to allocate it amongst the Opec and non-Opec members participating in the cuts.
Whatever additional, deeper cuts were agreed to by Opec for the Opec+ group will now require approval and ratification at a full-blown Opec+ meeting scheduled for 11am in Vienna on 6 December.
Deepening the cut will not require much of a reduction from recent output levels. Combined production from the 21 Opec and non-Opec countries participating in the agreement was 440,000 b/d lower than the collective ceiling in October, according to Argus estimates.
Saudi Arabia's over-compliance in October amounted to 570,000 b/d, which is significantly more than the proposed cut. Overall, the 11 Opec countries were 390,000 b/d over-compliant in October. Pressure will persist on serial non-compliers Iraq and Nigeria — which were short of their pledges by a combined 270,000 b/d in October — to meet the new deeper commitments. Nigeria said it reached full compliance in November and Iraq says it will be compliant "soon".
The JMMC also recommended an extraordinary meeting in March to determine output policy beyond the end of the first quarter.
By Iain Packham and Ruxandra Iordache
