On Sunday 12 April, after 4 days of discussions, the OPEC+ member countries eventually agreed to reduce oil production by 9.7 million barrels per day (bpd) in May and June, equivalent to about 10% of world supply, in order to respond to the fall in oil prices caused by the Covid-19 pandemic (see EUROPE 12461/20).
“The big Oil Deal with OPEC Plus is done. Great deal for all!”, tweeted American president Donald Trump.
The agreement, which runs until 30 April 2022 and which will be reviewed in December 2021, allows for a further reduction to 7.7 million bpd in the second half of 2020 and 5.8 million bpd between January 2021 and April 2022.
Although the discussions were initially scheduled to take place on Thursday 9 and Friday 10 April (first in OPEC+ format, and then at a meeting of the G20 Energy Ministers - see EUROPE 12465/13), they were extended to Sunday. The matter at issue was Mexico's refusal to commit to reducing by more than 100,000 bpd, which was only a quarter of what other countries were asking for (400,000 bpd).
The oil-producing counties eventually overcame the deadlock when the United States committed to reducing its production by an additional 300,000 bpd to compensate for Mexico’s contribution.
Non-OPEC+ G20 countries are also reported to have proposed production cuts for next year totalling 3.5 to 3.7 million bpd, which is lower than OPEC+ had suggested (5 million barrels).
According to Reuters, Norway might soon officially announce its decision to reduce production.
However, the United States did not make a clear commitment to reduce production, arguing that the market would automatically reduce production by 2 million bpd this year. (Original version in French by Damien Genicot)