MOSCOW (Pakistan Point News / Sputnik - 10th April, 2020) OPEC confirmed that its members states and non-OPEC countries have reached a new oil output cuts deal that envisages a three-stage reduction of production compared to the level of October 2018 for all involved parties except for Russia and Saudi Arabia, which will use 11 million barrels per day (mb/d) as a baseline for their calculations.
The deal was concluded as a results of an extraordinary meeting that was held via a video conference and finished earlier on Friday. The deal is conditional on the consent of Mexico that withdrew from the negotiations.
"Adjust downwards their overall crude oil production by 10.0 mb/d, starting on 1 May 2020, for an initial period of two months that concludes on 30 June 2020. For the subsequent period of 6 months, from 1 July 2020 to 31 December 2020, the total adjustment agreed will be 8.0 mb/d. It will be followed by a 6.0 mb/d adjustment for a period of 16 months, from 1 January 2021 to 30 April 2022. The baseline for the calculation of the adjustments is the oil production of October 2018, except for the Kingdom of Saudi Arabia and The Russian Federation, both with the same baseline level of 11.0 mb/d," the statement said.
The Azerbaijani Energy Ministry explained earlier in the day that OPEC+ states will reduce their oil production by 23 percent from the baseline from May-June, 18 percent from July-December and 14 percent from January 2021-April 2022.
Thus, under the agreement, Moscow and Riyadh are set to cut their oil production to 8.5 million barrels per day, 9.02 million barrels per day and 9.46 barrels per day at each stage, respectively.
The member states also agreed to extend the mandate of the Joint Ministerial Monitoring Committee (JMMC) to review general market conditions, oil production levels, as well as the compliance with the new deal. In addition, the signatories decided to monitor crude oil production proceeding from the information from secondary sources
The agreement will be in force until 30 April, 2022 with the possibility of its extension in December 2021.
The next OPEC+ meeting on measures to stabilize the oil market is scheduled for June 10 and will be held in the format of a video conference.
