TEHRAN (Iran News) – OPEC, Russia and other oil producers agreed on Sunday to cut output by a record amount, representing around 10 percent of global supply, to support oil prices amid the coronavirus pandemic.
The group of top oil producers, known as OPEC+, agreed to cut output by 9.7 million barrels per day (BPD) for May-June, after four days of marathon talks, Reuters reported.
Two OPEC+ sources told Reuters the deal had been sealed in a video conference on Sunday, and the agreement was confirmed in a statement from Kazakhstan’s Energy Ministry.
In the biggest oil output cut ever, the countries will keep gradually decreasing curbs on production in place for two years until April 2022.
Measures to slow the spread of the coronavirus have destroyed demand for fuel and driven down oil prices, straining budgets of oil producers and hammering the US shale industry, which is more vulnerable to low prices due to its higher costs.
OPEC+ has said it wanted producers outside the group, such as the United States, Canada, Brazil, and Norway, to cut a further five percent or 5m BPD.
Canada and Norway had signaled willingness to cut and the United States, where legislation makes it hard to act in tandem with cartels such as OPEC, said its output would fall steeply by itself this year due to low prices.
Global oil demand is estimated to have fallen by a third as more than 3 billion people are locked down in their homes due to the coronavirus outbreak.
- source : Iran Daily, Irannews