OPEC and non-member countries will hold an emergency meeting in Abu Dhabi, United Arab Emirates, August 7-8, OPEC has issued a statement.
It was reported that Kuwaiti and Russian representatives will chair the meeting. The main object of the discussion will be the failure of the member states to fully comply with their commitments.
All countries invited to the meeting have not yet confirmed their participation. Algeria and Venezuela, who are members of the OPEC's monitoring committee, will probably not be able to attend the meeting.
According to the International Energy Agency (IEA), these two countries fulfilled their obligations on average by 70% and 39%, respectively. Other problematic countries are Iraq and the UAE, which have fulfilled their obligations by 29% and 60%, respectively.
The IEA report also stated that the OPEC + oil production commitment agreement was generally fulfilled by 78% in June. In May this figure was 95%.
How will outcomes of the meeting effect on the market?
The Head of Oil Research Center Ilham Shaban told in his statement to "Kaspi” that it’s the meeting of monitoring committee : " The committee controls OPEC decisions. Quotas released in Vienna Congress are controlled by the committee. Quotas did not apply to countries such as Nigeria and Libya and they increased oil output more than the norm. At the meeting held on May 25, any limits were not imposed on these countries. This was due to the damage to the economy of those countries, as there was a conflict in Libya, and the production dropped dramatically in Nigeria over the ethnic conflict and the infrastructure of oil companies in those countries has been destroyed, production has been stopped. That is why the organization has not protested this decision.
According to Ilham Shaban prices rose by 30 percent in the first half of the year compared to the same period last year.
On the other hand statements made by the countries that agreed with agreement due to production do not comply with actual sales figures. Consequently, oil market has become a raw material market, that is hardly transparent in terms of transparency.