Opec+ Deal To Reduce Oil Production Comes Into Force
The OPEC+ deal to reduce oil production to balance the market came into force on May 1.
The deal implies a 9.7 million BPD reduction in oil production from October 2018, with the exception of Russia and Saudi Arabia, which will reduce from 11 million BPD.
In May-June, OPEC countries' oil production decreased+ from this level, it will be 9.7 million b / d (by 23%), from July to the end of 2020 – 7.7 million b/d (by 18%), then, until May 2022 – 5.7 million b/d (by 14%).
In May, Russia will have to produce 8.5 million BPD.
All Russian companies will take part in cuts, including small companies and projects under agreements on production section, the quota is distributed proportionally.
OPEC+ countries reduced production at the call of the US.
OPEC + countries agreed on April 9 to reduce oil production and call on major producers that are not part of the Alliance to help stabilize the oil market.
On April 10, the G20 agreed to maintain global market stability in the face of the COVID-19 epidemic and set up a working group to monitor the response.
OPEC+ countries approved the final decision on April 12, reducing the share of Mexico, which agreed to reduce production by 100 thousand BPD instead of 400 thousand PPD.
In the first week of April, when the deal was discussed, the drop in demand due to the coronavirus pandemic was estimated at 15-20 million BPD.
Since the decision was made, demand has fallen to 25-30 million BPD, and experts do not rule out that additional production cuts may be necessary.