OPEC decided to reduce oil production historically

The path for a historically unique strangulation of oil production by the OPEC oil cartel and its partners is clear. In a special video session on Sunday night, the oil-producing countries agreed to cut 9.7 million barrels per day for May and June, as Mexican Energy Minister Rocio Nahle and the minister said on Twitter. of Kuwaiti oil, Khaled al-Fadhel.

Al-Fadhel spoke of a “historic” agreement. The Kazakh Ministry of Energy also confirmed the agreement, according to the Kazakh agency Tengrinews and the Russian agencies. The quantity is around 300,000 barrels (159 liters each) per day below the original destination decided on Friday. Basically Verbund had already agreed to cut production there, but Mexico blocked the firm.

Mexico had refused to contribute the 400,000 barrels required to the end and held on to its offer to remove 100,000 barrels from production. The production cut corresponds to around ten percent of daily oil production worldwide. Other countries such as Canada and the United States are expected to reduce production.

Russian President Vladimir Putin telephoned his American colleague Donald Trump at night, as the Kremlin said. Russia, the United States and Saudi Arabia, therefore, support the agreement. The limitation could “stabilize world markets and ensure the sustainability of the global economy as a whole.” Talks about this should continue, he said. Putin also spoke to King Salman of Saudi Arabia.

Initially it was unclear whether the round also confirmed targets for the period through April 2022. The round called the Saudi Arabian heavyweight, called OPEC +, agreed on Friday to cut production by eight million barrels a day of oil from July to December. Between January 2021 and April 2022, the daily production cut should amount to six million barrels. The production level was established in October 2018, and Saudi Arabia and Russia have their own starting level of 11 million barrels per day.

With the cut, OPEC + wants to stabilize the price of oil, which has fallen rapidly in the crown crisis. It is not yet clear if the decision will cause service stations to increase gasoline prices.

The price of oil had fallen sharply in recent weeks, sometimes even the lowest level in 18 years. The reasons are the low world demand for raw materials due to the coronavirus pandemic and the price war between Russia and Saudi Arabia.