OPEC, Russia and other oil-producing nations on Sunday finalized an unprecedented production cut of nearly 10 million barrels, or a tenth of global supply, in hopes of boosting crashing prices amid the COVID-19 pandemic and a price war, officials said.
The cartel and other nations agreed to allow Mexico to cut only 100,000 barrels a month, a sticking point for an accord initially reached Friday after a marathon video conference between 23 nations. They reached the deal just hours before Asian markets reopen Monday as international benchmark Brent crude traded at just over $31 a barrel and American shale producers struggle.
Iranian Oil Minister Bijan Zanganeh also told state television that Kuwait, Saudi Arabia and the United Arab Emirates would cut another 2 million barrels of oil a day between them atop the OPEC+ deal. The three countries did not immediately acknowledge the cut themselves, though Zanganeh attended the video conference.
Nigeria’s Petroleum Resources Ministry said in a statement that other planned cuts would stand in the deal, meaning an 8 million barrel per day cut from July through the end of the year and a 6 million barrel cut for 16 months beginning in 2021.
The Minister of State for Petroleum Resources, Chief Timipre Sylva, has expressed optimism that crude oil prices would soon rebound by at least $15 per barrel following OPEC+ counterparts’ historic curtailment of crude oil production at their April 9 ministerial meeting.
He said the intervention would also help to “rebalance and stabilize the global oil markets’’. Sylva said this in a statement in Abuja on Friday on the fall-out of the 9th OPEC/NON-OPEC declaration of cooperation ministerial meeting to curtail crude oil production up to 10 million barrels.