The slam is coming on the country for failing to comply with the June 22 deadline as ultimatum to submit a schedule of the oil compensation plan.
The sanction became necessary due to the failure to fully comply with an April deal geared towards cumulative cuts of production by about 9.7 million barrels daily.
A statement from OPEC late last week after the 19th Joint Ministerial Monitoring Committee (JMMC), held via video conferencing, chaired by Saudi Arabia’s Minister of Energy, Prince Abdul Aziz Bin Salman, and co-Chair, Mr. Alexander Novak, the Minister of Energy of the Russian Federation, noted that sticking with the cuts as promised was not only the fair thing to do but also an equitable move as well.
The statement further noted that the committee had reviewed the monthly report, which was arranged by the Joint Technical Committee (JTC) and recent developments in the global oil market, as well as immediate prospects for the remainder of 2020 and into 2021.
The Committee, however, delegated the OPEC secretariat to reach out to countries that are still defaulting towards getting a commitment from them that their product cut plan was still active.
According to the statement; “the committee emphasized the critical importance of adhering to full conformity and compensating the overproduced volumes in the months of May and June, during the months of July, August and September 2020, in accordance with the statement of the 11th OPEC and non-OPEC Ministerial Meeting of the DoC (June 6, 2020), in particular with reference to the five elements agreed.
“The committee would like to thank those participants, namely Iraq and Kazakhstan, which have already submitted their compensation schedules, and agreed to give other underperforming participants, which have not yet submitted final plans, until Monday, June 22, 2020, to submit their schedules for compensation to the OPEC Secretariat”.
Furthermore, the secretariat was also asked to reach out to all the underperforming participating nations to submit their schedules for compensation by the above-mentioned date.
The statement pointed out that the attainment of 100 per cent compliance from all participating nations was not only fair and equitable but vital for the ongoing and timely rebalancing efforts and helping deliver sustainable oil market stability.
“The committee took note of the overall conformity of 87 per cent for the month of May 2020. It also observed individual country conformity levels and reiterated the critical importance that all participating countries achieve their 100 per cent level.
“They will also make up for any monthly shortfalls in the months of July, August, and September. It welcomed the expressed commitments from those countries below the 100% May conformity level and specific compensation plans highlighting how this will be accommodated, and delivered, between July and September,” OPEC said.
Other countries that may get sanctioned for failing to submit a schedule of the oil production cut compensation plan are; Angola, Gabon and Azerbaijan countries also failed to submit a schedule of the oil production cut compensation plan.
Meanwhile, Iraq and Kazakhstan according to the statement are already taking steps to fulfill their mandates