On 3 August 2022, the joint 31st OPEC and non-OPEC Ministerial video session was held via videoconference. The video session highlighted that the oil market fundamentals are dynamic and rapidly changing, demanding a regular evaluation of market situations.

The video session observed that due to the highly limited availability of surplus capacity, it must be used with extreme prudence in response to serious supply interruptions.

It also underlined that persistent underinvestment in the oil sector has reduced excess capacity throughout the value chain (upstream, midstream, and downstream).

Furthermore, it voiced special worry that a lack of upstream investment could negatively affect the capacity to obtain sufficient supply in time to satisfy rising demand from non-OPEC oil-producing nations, some OPEC Member Countries, and participating non-OPEC oil-producing nations after 2023.

According to preliminary data, OECD commercial oil stocks were 2,712 mb in June 2022, which was 163 mb less than they were at the same time last year and 236 mb less than the average for the years 2015 to 2019. It also noted that emergency oil stocks had fallen to their lowest levels in more than 30 years.

The conference noted that, as a result of voluntary contributions from some participating countries, Declaration of Cooperation compliance has averaged 130 percent since May 2020.

In light of the most recent developments in the oil market, as well as the significance and applicability of preserving agreement as essential to the unity of OPEC and participating non-OPEC oil-producing nations.

Highlights

• For the month of September 2022, raise production levels for OPEC and non-OPEC Participating Countries by 0.1 mb/d. The baselines established at the aforementioned video session on July 18, 2021 are unaffected by this adjustment.
• Place a strong emphasis on the necessity of complete conformity and the compensation scheme. Plans for compensation should be offered in accordance with the declaration from the 15th Ministerial Session of OPEC and non-OPEC.
• The 32nd OPEC and non-OPEC Ministerial session will take place on September 5, 2022.

Why Traders Should Care

The OPEC video session affects traders since it sets oil production caps for OPEC members and some non-voting observers. The quantity and price of oil around the world may be significantly impacted by these quotas.

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