OPEC meeting April 2020 : Countries to cut crude oil production amid COVID-19 crisis

OPEC meeting April 2020 : OPEC and other oil producing nations have reached a consensus on cutting production of crude oil by 10 million barrels per day (mb/d) for the next couple of months owing to the low demand for oil resulting from the recent coronavirus crisis.

The countries, which took part in an extraordinary webinar decided that from the start of July till the year-end, crude oil production will be adjusted to 8.0mb/d.

The OPEC meeting April 2020 was chaired by Prince Abdul Aziz Bin Salman, the Saudi Energy Minister, while his Russian counterpart Alexander Novak co-chaired the meeting.

OPEC, which expands to Organization of the Petroleum Exporting Countries, said that the oil production in October 2018 has been taken as the baseline for calculating the adjustments. Both Saudi Arabia and Russia, which had the baseline level of 11.0mb/d have been the exception to this.

Mexico did not agree to the various measures agreed upon by the countries though during the OPEC meeting April 2020. With the country virtually walking out from the webinar, the agreement of the other nations on the measures will stand to be conditional on Mexico’s consent.

The intergovernmental organization, in a press release, stated: “In the meeting, the OPEC and non-OPEC oil producing countries participating in the Declaration of Cooperation, reaffirmed their continued commitment in the Declaration of Cooperation to achieve and sustain a stable oil market, the mutual interest of producing nations, the efficient, economic, and secure supply to consumers, and a fair return on invested capital.”

The agreement reached in the OPEC meeting April 2020 will remain in force till 30 April 2022 and could be extended based on a review during December 2021. Another meeting has been scheduled for the participating nations on 10 June 2020, which will also be a webinar, with focus on determining additional steps needed to balance the market.