OPEC countries reduce oil production: Details of long-awaited agreement

Author : Usy Asada Telegram channel

Source : 112 Ukraine

On what conditions Russia and OPEC agreed?
21:37, 15 April 2020


OPEC member countries finally agreed on the final version of the deal to reduce oil production to stabilize world prices.

The main points of the historical agreement are as follows:

1. The largest oil-producing states will reduce production by 9.7 million barrels per day from May to June this year. Quotas of the Russian Federation and Saudi Arabia are 2.5 million for each.

2. In total, starting May 1, 2020, OPEC member countries and their partners will reduce production to 19 million barrels per day. This will happen in stages, first in May-June, then in July-December, and then after the next revision of the agreement.

3. Mexico initially abandoned its quota, according to which it should have reduced 400 000  barrels of oil. As a result, the Mexicans agreed to 100 000, and the United States took over the remaining 300 000.

4. In July-December, there will be another reduction, as expected by 7.7 million barrels per day. And in December 2020 - May 2022, another one – by 5 million barrels.

Related: Trump gets the oil deal he wants by staying on the sidelines

But there is no final agreement on these reductions, because at least the position of Mexico itself, from which further reductions may be required, is not clear.

5. A comprehensive review of the transaction will be in December 2021. It will either be extended or changed.

6. The United States will reduce its production by 2-3 million barrels per day + 300 thousand Mexican quotas. Other countries will join the OPEC + agreement, including Canada and Norway.

In general, the price war between Saudi Arabia and Russia has officially ended, OPEC + is still afloat, and oil prices will stabilize before the end of the year according to forecasts by OPEC analysts.

Now it will be necessary to decide how to overcome the problem of the lack of demand for this very oil, which is now in abundance on the market after the Saudis and Russians provoked a collapse in prices and uncontrolled production for a month.

Related: Putin makes painful climbdown as he sues for peace in oil war

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