When and how must Opec exit the current deal and must it replace it with another?
Opec and its allies must decide when to switch focus from limiting output and cutting stocks, to growing production again to meet rising demand
London — Smoothly exiting from the current output pact, and perhaps replacing it with another agreement, has become the most important policy question for the Organisation of the Petroleum Exporting Countries (Opec) and its allies. Under the current "declaration of co-operation", issued in December 2016, Opec with Russia and some nonOpec countries have pledged to limit their output. Production limits were originally intended to apply for six months between January and June 2017 but have since been extended for a further nine months until the end of March 2018. The original declaration was vague about its objectives but senior officials have since indicated the primary goal is to reduce oil inventories in OECD industrialised countries down to the five-year average. Opec and its allies are now roughly half-way towards that goal, with stocks about 160-million to 170-million barrels above the five-year average, compared with 280-million at the start of 2017 (Monthly oil market report, O...
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