On top of the OPEC+ deal that will see oil output cut by 10 million barrels per day, producers outside the group are expected to slash the supply by at least five million more, Russian Energy Minister Alexander Novak said.
“We believe that, in addition to the 10 million barrels [cut], which was undertaken by OPEC+, there would be another 5 million barrels from oil producers outside of OPEC+,” Novak said Friday, while speaking to Russian television.
Canada, for instance, was ready to cut its output by some 1 million bpd, Novak said. The minister did not give any estimates on how much the US or others might contribute to the output reduction.
Meanwhile, US President Donald Trump said that Washington would reduce its output by an additional 250,000 bpd to make up the difference from Mexico, which only agreed to lower its production by 100,000 bpd rather than 400,000 that OPEC+ requested.
The so-called OPEC+ group, consisting of Organization of the Petroleum Exporting Countries (OPEC) members and several non-cartel countries, including Russia, have tentatively agreed on a new output agreement after lengthy discussions, according to multiple media outlets. Production cuts are aimed to bolster the price of oil plunged into free-fall by Saudi Arabia last month, and will last through May 2022.
Further OPEC+ consultations are scheduled for Saturday, when the final agreement may be officially announced.
If needed, the OPEC+ may take additional steps to stabilize the turbulent and oversaturated oil market, while the duration of the agreement can be easily tweaked, added the Russian energy minister.
“We can prolong this period if necessary. In case of faster stabilization of the market situation, we might decide to end the market reconstruction efforts earlier,” Novak said.
The Saudi-initiated price war, ostensibly targeting Russia but downright devastating the US shale sector, was soon exacerbated by the coronavirus pandemic. With travel drastically reduced by lockdown measures, worldwide demand plummeted, further contributing to the oversupply and spelling more troubles for crude producers as storage shortages began to loom.
Like this story? Share it with a friend!
