OPEC: All allies except Mexico agree on drop in oil production
The Organization of the Petroleum Exporting Countries (OPEC) announced on Friday that a webinar meeting between global energy ministers, with the exemption of Mexico, had resulted in an agreement to reduce oil production to stabilize the market.
In a meeting that stretched late into Thursday evening, members of the OPEC+ cartel outlined a plan to cut production by 10 million barrels per day. This would correspond to around 10 per cent of global production.
Mexico was exempt from the meeting and, as a result, “the agreement is conditional on the consent of Mexico,” the oil cartel said in a statement.
The reduction is planned to start on May 1 for an initial two-month period. After that, the daily production volume would be gradually adjusted until the end of April 2022.
Many members of the OPEC+ cartel, an expanded format of OPEC that includes Russia, have economies dependent on oil prices.
A price war between Russia and Saudi Arabia has drastically driven down oil prices globally. On top of that, a slowdown prompted by the coronavirus pandemic has reduced demand.
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OPEC General Secretary Mohammed Barkindo said in his opening speech on Thursday that the organization expects demand for crude oil to decrease by 6.8 million barrels a day in 2020.
According to Barkindo, the decline in the second quarter could even expand to around 12 million barrels. (dpa)
