OPEC representatives and other major oil-producing countries have met in Vienna to monitor whether they are adhering to the agreement that they signed in December 2015 to reduce oil output. Of course, oil and gas contractors and companies will be anxious to know the outcome of this meeting as it will have a profound effect on the price of oil.
OPEC Secretary General Mohammed Barkindo stated that the meeting was scheduled to establish a mechanism to check that the nations were taking measures to reduce their oil production by 1.8 million barrels a day, as agreed by them.
The meeting will help the nations to formulate a plan on how to determine that the 24 nations that have signed the agreement are keeping to their promise to reduce their oil production, while ensuring that the agreed upon amount of supply is maintained for six months.
OPEC is eager to show the world that it does not resort to cheating – something that it has been accused of for decades. The group is trying to ensure that the oil supply surplus is handled in an efficient manner, and this, in turn, will help elevate oil prices.
Barkindo emphasised that he had no doubts that Russia was committed to the agreement, and this would bring about short-term and long-term stability to oil production as well as oil prices.
After the OPEC and non-OPEC nations agreed to reduce oil production, the oil price increased to more than $58, the highest that it has been in the last 18 months. However, since then, oil prices have reduced by five per cent as there are concerns that countries will not stick to the agreed reduction in output.
OPEC will meet again in May this year to decide whether to extend the reduction in oil production for several more months.