The meeting of the OPEC countries on the future of the OPEC + deal began in the format of a video conference broadcast on the organization’s website.
OPEC and OPEC+ energy Ministers will hold meetings on Saturday to discuss the first results of the deal, its implementation by countries, and the future of the agreement to reduce oil production.
The new agreement has been working since the beginning of May; it was adopted against the background of the crisis due to the coronavirus pandemic, lower oil prices and a drop in demand from more than 100 million barrels per day to 70-80 million barrels per day.
Under the terms of the deal, the OPEC + Alliance reduces production by 9.7 million barrels per day in May-June, 7.7 million in the second half of the year, and 5.8 million further until the end of April 2022. The base of reference for the reduction is taken in October 2018. Still, for Russia and Saudi Arabia, 11 million barrels per day are made, from which, by analogy with all of them, there is a decrease of 23%, 18%, and 14%, respectively.
The Alliance previously noted that, based on the market situation, the terms of the agreement might be changed. So, now the countries are discussing the possibility of extending the current volume of production cuts of 9.7 million barrels per day for some time after June. However, the critical point in making such a decision is full compliance by all participants with their obligations, including the traditional violators: Iraq, Nigeria, and Kazakhstan.