History of the OPEC + oil pact
US, WASHINGTON (ORDO NEWS) — The OPEC + deal restricting global oil production in 3.5 years will be executed in June, the transaction history follows:
At the end of 2016, to improve the global oil market, which before that had shown quotes falling below $ 30 per barrel, the Russian Federation and OPEC + partners were able to agree on limiting the global production of raw materials from January 1, 2017 by 1.8 million barrels per day, per share Russia in this volume accounted for 300,000 barrels per day from the level of production in October 2016 – 11.2 million barrels of oil and gas condensate per day.
From July 2017, the transaction was extended under the same conditions, first until March 2018, and later until the end of 2018.
However, in the summer of 2018, oil quotes soared to $ 80 per barrel against the background of the situation in Venezuela, Libya, as well as expectations of a drop in production in Iran due to U.S. sanctions.
By May 2018, the transaction was carried out by countries by 150%, the total reduction in oil production was about 2.7 million barrels per day, therefore, from the end of June 2018, the partners decided to increase world production by 1 million barrels per day. The Russian Federation increased its production of raw materials already in June – by 200,000 barrels per day.
Since January 2019, the OPEC + countries approved a new reduction – by 1.2 million barrels per day, the Russian Federation accounted for 228,000 barrels per day of oil and gas condensate, but by the level of October 2018 – 11.4 million barrels per day.
From July 2019 to the end of March 2020, OPEC + participants increased the overall decline to 1.7 million barrels per day, the Russian Federation was supposed to reduce 298,000 barrels per day.
Moscow experienced difficulties with the execution of the transaction at the end of 2019, and then gas condensate was excluded from its production statistics from January 2020, which accounts for approximately 7% of the production of liquid hydrocarbons in the Russian Federation.
In March 2020, the parties to the transaction were unable to reach an agreement to extend the OPEC + pact because of different positions: the Russian Federation proposed to extend the current conditions for the next quarter, while OPEC countries proposed a reduction of another 1.5 million barrels per day until the end of 2020.
In April 2020, the OPEC + transaction did not work, countries were free from obligations. For the first time in the history of the oil industry in April 2020, futures on the American WTI grade went into the negative zone due to collapse in demand and lack of storage facilities in the USA.
According to the latest agreement, in May-June 2020, OPEC + countries pledged to reduce global production by 9.7 million barrels per year, including the Russian Federation – by 2.5 million barrels per day from 11 million barrels per day. But since the actual level of oil production in the Russian Federation in February 2020 amounted to 10.5 million barrels per day, the reduction for the Russian Federation will be 2 million barrels per day.
Reuters sources say that partners do not exclude the possibility of maintaining this reduction after June, if necessary.
The energy ministers of the countries participating in the pact expect that the total reduction in global production of raw materials in May-June can reach 20 million barrels per day, taking into account other countries such as the USA, Canada, Norway, which did not join the deal, but announced a natural reduction in oil production.
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