The oil market could demonstrate an excess of supply in 2019, but decided to wait with a decision to reduce oil production by December, the OPEC Ministerial Committee on Monitoring the Transaction decided during the extraordinary meeting.
Russia and Saudi Arabia increased in October production to record historical levels, trying to recover short supply from Venezuela and Iran, despite the fact that the decline in production in Venezuela slowed down, and Libya’s production began to recover faster.
Concerned about the skyrocketing oil prices, US President Donald Trump, a couple of days before the introduction of oil sanctions against Iran, allowed eight countries, including the largest exporters of India and China, to buy Iranian oil.
As a result, the OPEC + Ministerial Committee recognized that in 2019 there could be an overabundance of oil in the market. A statement from the JMMC following the meeting noted that worsening global growth prospects given the current market uncertainty may have implications for global oil demand in 2019, CNBC reported.
"The Committee reviewed current oil supply and demand fundamentals and noted that 2019 prospects point to higher supply growth than global requirements, taking into account current uncertainties," the Joint Ministerial Monitoring Committee said.
The expected oversupply of oil on the market in 2019 led the ministerial monitoring committee to conclude that next year a new strategy and adjustments may be needed to balance the market.