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Opec’s Secretary General said he predicted greater compliance with a global supply deal even as he said there were “teething” issues in ensuring full cooperation from producers outside the cartel.
Speaking at the annual International Petroleum Week conference in London, Mohammad Barkindo said: “All countries involved remain resolute in the determination to achieve a higher level of conformity.”
Late last year, Opec countries along with producers outside the cartel agreed to curb global supplies to ease a crude surplus and stabilise an oil price downturn. It was the first joint supply deal since 2001.
Mr Barkindo said on Tuesday he expected more countries to take part. January production data in Opec’s most recent monthly report showed more than 90 per cent conformity with agreed output curbs among participating countries.
However the 11 non opec countries that are part of the deal, including Russia, have achieved a compliance level of only around 40 per cent, according to industry data.
“Conformity… is new to non-Opec. They have never been bound by any mechanism in the past. We need to give them the benefit of the doubt in the initial stages [of the deal]. It is normal to have teething challenges in the beginning,” he said.
Opec and partners outside of the cartel had still not achieved “equilibrium price” as stockpiles remain high, Mr Barkindo said.
Brent crude prices gained 88 cents on the news – up 1.6 per cent on the day to $57.06 on the day.