OPEC + agrees to curb crude oil production

The oil-producing countries united in the OPEC + association agreed on a brake on the production of crude oil after a hard fight. In doing so, they want to stop the fall in the price of their important export products. The OPEC + group of states, which includes other countries such as Russia in addition to the members of the export cartel, agreed to reduce daily production by ten million barrels (159 liters each).

This corresponds to about ten percent of the global supply. The reduction should apply to the two months of May and June. After that, the delivery fee should be further reduced. Another OPEC + meeting via video conference should take place on June 10 to assess the situation in the oil markets.

The talks were complicated by falling demand due to the coronavirus pandemic and the United States’ refusal to cut production as well. According to experts, US oil shale producers need an oil price of around $ 50 per barrel (159 liters) to work profitably. The U.S. oil-grade WTI currently only costs around $ 23. The first oil shale oil companies have already filed for bankruptcy protection.

In early March, the drop in prices was caused by Russia’s refusal to further reduce production volumes due to the coronavirus crisis. Restrictions to contain the pandemic have reduced global demand for crude oil by around a third or 30 million barrels per day in a few weeks.