OPEC and its allies led by Russia meet on Saturday to approve extending record oil production cuts, also Nigeria and Iraq also agree to cuts as prices begin to recover with coronavirus lockdowns easing.
Opec+ had agreed in April that it would cut supply by 9.7m barrels per day (bpd) during May-June to prop up prices that had collapsed due to the coronavirus crisis. Those cuts were due to taper to 7.7m bpd from July to December.
Iraq produced 520,000 bpd above its quota in May, while overproduction by Nigeria was 120,000 bpd, Angola’s was 130,000 bpd, Kazakhstan’s was 180,000 bpd and Russia’s was 100,000 bpd, Opec+ data showed.
“It was unanimously agreed by Opec and Opec+ countries to extend the current reduction to the end of July,” said Suhail Al Mazrouei, the UAE’s energy minister, after the meeting.
“Demand is returning as big oil-consuming economies emerge from pandemic lockdown. But we are not out of the woods yet and challenges ahead remain,” the Saudi energy minister, Prince Abdulaziz bin Salman, told the video conference of Opec+ ministers on Saturday.
Russia will cut its crude oil production to 510-520 million tonnes in 2020 from around 561 million tonnes in 2019, Energy Minister Alexander Novak said on Saturday.
Novak, speaking shortly after OPEC, Russia and others agreed to extend record oil production cuts until the end of July, said the United States had cut its oil output by 1.9 million barrels per day.
“I applaud OPEC-plus for reaching an important agreement today which comes at a pivotal time as oil demand continues to recover and economies reopen around the world,” the US energy secretary, Dan Brouillette, wrote after the extension.
Opec and Opec+ will hold their next scheduled meetings on 30 November.