OPEC announces readiness to radically cut oil output

OPEC announces readiness to radically cut oil output

The Organization of Petroleum Exporting Countries (OPEC) has developed several options for reducing oil output for the OPEC + meeting, which will be held on April 9, Bloomberg reports with reference to the organization’s materials.

According to one of them, global output by will be cut by about 10 million barrels a day by the end of the year. Another option provides for the rejection of cutting oil output. OPEC analysis estimates for demand to fall by 11.9 million barrels a day this quarter.

The OPEC + meeting on the possibility of new oil output cuts to stabilize the market will be held as a videoconference on Friday. It will be followed by a meeting of energy ministers from the Group of 20 major economies on energy market stability. The final decision of OPEC + will depend on the results of subsequent negotiations of the G20 energy ministers, a previously informed source said.

The OPEC+ agreement on crude production cuts expired on March 31, 2020. Russia and Saudi Arabia failed to come an agreement on the terms of its extension after March, which triggered an increase in production in OPEC states. Concurrently, the demand posted an unprecedented plunge due to the coronavirus pandemic. Those factors combined pushed the oil price down to $22 per barrel for the first time in two decades. By the end of March, the partners had decided to resume consultations and involve other producers from G20 counties in joint efforts.