OPEC+ Countries Agree on Oil Production Reduction

The agreement of the OPEC + countries means a reduction in oil production by 10 million barrels in May and June 2020, and from July to December - by 8 million. The agreement will enter into force with the consent of Mexico. Members of the Organization of Petroleum Exporting Countries (OPEC) and its partners, reached a compromise on the issue to reduce oil production on Friday morning, April 10, in order to prevent the further drop in world prices. The terms of agreement include a decrease in daily production by 10 million barrels in May and June. During the second half of 2020, daily production will increase but will still remain below the current level of 8 million barrels. The agreement will enter into force only if Mexico accepts it. Earlier it was reported that the Mexican Minister of Energy did not agree with OPEC plans and left the meeting that lasted 11 hours. Then, there was information about Mexico’s readiness to reduce its oil production by 100 thousand barrels per day over the next two months. The Russia and Saudi Arabia Oil War At the beginning of March in Vienna, OPEC participants and its partners could not agree on a further production reduction by additional 1.5 million barrels per day. In particular, Saudi Arabia insisted on reduction while Russia opposed. The negotiations failure led to a drop in oil prices till the minimum over 18 years. Its cost was also affected by the COVID-19 pandemic.