On Wednesday, Reuters reported that OPEC and some non-cartel countries, including Russia, are looking to formalize their cooperation by a enacting a charter that will allow further joint action on production. Organization of Petroleum Exporting Countries photo.
OPEC, non cartel countries’ cooperation helped cut global oil glut
According to a report by Reuters, OPEC along with some non-cartel countries, including Russia, are looking to formalize their cooperation by approving a charter that will make joint action on future production possible.
The report is based on a draft charter seen by Reuters.
In January of 2017, OPEC along with a number of countries agreed to cut their combined output by 1.8 million barrels per day to cut the oversupply of crude.
Strong compliance with the pact by participants has helped boost oil prices from less than $30/barrel to nearly $80/barrel.
Deal kingpins, Russia and Saudi Arabia have said they would like to continue cooperating even after the oil market stabilizes and the current OPEC supply cut agreement expires.
Reuters reports that the draft charter will be discussed by OPEC and non-cartel oil ministers this year. OPEC says the fundamental objective of the charter is to coordinate prices to stabilize crude markets to benefit consumers, producers, investors and the global economy.
Riyadh and Moscow also hope the charter will promote a better understanding of oil market fundamentals among participants as well as ensure oil and gas will be included in the global energy mix for the long term.
The charter calls for ministers of participating countries to meet once a year and experts to convene twice a year. Following the meetings, the ministers could propose actions as well as possible summits involving heads of state.
The OPEC secretariat will host the charter’s secretariat in Vienna, Austria, but will remain independent.