At one point, it was believed that OPEC had no plans to make public the country quotas for each new production cut deal but it seems that has changed. The cartel now says they will publish a table for each OPEC and non-OPEC individual quotas. OPEC Secretary General Mohammad Barkindo admits this is a bit of a publicity stunt in an effort to boost positive sentiment amidst an oil market that continues to crash.
In a letter to OPEC members, Barkindo comments that this move is “in the interests of openness and transparency” in an attempt to improve market confidence. He adds that this move is necessary to ensure trust in the cartel’s decisions to protect themselves.
You may recall that OPEC reached a deal with its allies—led by Russia—to cut back on their combined oil production by 1.2 million barrels per day for six months, starting at the top of the year. Previous indications suggest the cartel did not announce any more individual quotas. OPEC’s contribution to this deal looks to be about 800,000 barrels per day. That is roughly equal to a 2.5 percent cut. In addition, the non-OPEC countries would contribute a 2 percent reduction of 400,000 barrels per day.
Barkindo has also mentioned that in order for this reduction to be effective, the percentage for OPEC member countries should be 3.2 percent if they want to comfortably reach the 1.2 million barrel agreement. Iran, Libya, and Venezuela, however, are all exempt from the cuts and that means the rest of the other OPEC members had to tweak some of their quotas which would accommodate those three countries who have received “special consideration.”
Taking a closer look at the table, Saudi Arabia’s share of the cut is 322,000 barrels per day, so Barkindo made sure to praise the region for making such a significantly higher commitment, which results in a production cut of about 10.2 million barrels per day. The table also shows us that Russia leads the OPEC nations with 230,000 barrels per day cut. The adjusted numbers in the table, then, show that OPEC nations are reducing production by 812,000 barrels per day while non-OPEC nations are reducing production by 383,000 barrels per day.