Dubai — Iraq backs an extension of the OPEC/non-OPEC production cut agreement, the country's oil minister said Sunday, while his Kuwaiti counterpart said current prices indicated the market was well-supplied, despite the US tightening sanctions on Iran.
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Register Now"If there was an oil shortage, you would have seen prices skyrocket," Kuwaiti oil minister Khaled al-Fadhel told S&P Global Platts on Sunday in Jeddah, Saudi Arabia, where an OPEC/non-OPEC monitoring committee meeting will take place in the afternoon and evening.
The Joint Ministerial Monitoring Committee is expected to review market forecasts, assess compliance with quotas and discuss options on extending the supply accord, under which OPEC and 10 non-OPEC partners agreed to cut 1.2 million b/d through June.
Front-month Brent crude futures closed Friday at $72.21/b and have risen more than a third since the beginning of the year, largely due to the OPEC/non-OPEC coalition's output declines.
With the US not renewing sanctions waivers for buyers of Iranian oil, the Trump administration is pressuring Saudi Arabia and the UAE to boost production to fill the expected supply gap and keep prices low.
But the Saudi and UAE energy ministers on Saturday indicated they would like to see the OPEC/non-OPEC supply accord continued, citing global oil inventory builds. However, they said they stand ready to increase production if a market squeeze does emerge.
Fadhel echoed those sentiments. Kuwait, which is currently producing around 2.7 million b/d in line with its quota, believes current oil prices are "still fluctuating" but can be handled by both consumers and producers, he said.
"We are able to increase in case OPEC decides we should increase our production level to meet the market demand," said Fadhel, who declined to reveal Kuwait's production capacity.
Iraqi oil minister Thamir al-Ghadbhan told Platts that Iraq was in full compliance with its quota and that he "fully supports" keeping production cuts in place beyond their June expiry.
OPEC's second largest producer was pumping 4.5 million b/d, he said, under its quota of 4.51 million b/d.
But many independent assessments of Iraq's output, including Platts' OPEC production survey, have it much higher. Platts estimates Iraq produced 4.67 million b/d in April.
On Saturday, UAE energy minister Suhail al-Mazrouei said he was satisfied with OPEC's overall compliance levels, but that countries who have exceeded their quotas would be pressured by the group to bring their production levels down.
"At the end of the day, what is important is the collective compliance," Mazrouei told reporters. "Those who are not complying, they will get letters, and we talk to them and they will need to adjust their conformity. Of course some countries cut more than they were supposed to do to ensure overall OPEC as a group are delivering the target."
The OPEC/non-OPEC coalition?s compliance in April stood at a collective 168%, delegates told Platts on Saturday, with Saudi Arabia, OPEC's largest producer, some 500,000 b/d below its quota of 10.31 million b/d.
The JMMC meeting is scheduled to start at 4 pm local time (1300 GMT), with a press briefing set for 9 pm (1800 GMT).
--Herman Wang, herman.wang@spglobal.com
--Dania Saadi, dania.el.saadi@spglobal.com
--Edited by Claudia Carpenter, claudia.carpenter@spglobal.com