October 3, 2023

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OPEC, allies reach primary agreement to balance oil market

TEHRAN – Iranian Oil Minister Bijan Namdar Zanganeh said on Friday that the Organization of the Petroleum Exporting Countries (OPEC) and its allies have reached an agreement for cutting their oil output by at least 10 million barrels per day (bpd) in the upcoming months of May and June, Shana reported.

As reported, the decision was made during a video meeting between energy ministers of 23 OPEC and non-OPEC allies on Thursday.

According to Zanganeh, in addition to the agreed figure, other countries such as Brazil, Norway, and the United States are also expected to cut their production.

Iran, Venezuela, and Libya are exempt from production cuts, Zanganeh said.

“The production cuts are going to start on 1 May 2020, for an initial period of two months that concludes on 30 June 2020. Then for another 6-month period, from 1 July 2020 to 31 December 2020, the total adjustment agreed will be 8.0 million bpd,” the oil minister said.

It will be followed by a 6.0 million bpd adjustment for a period of 16 months, from 1 January 2021 to 30 April 2022, the official added.

This is the first time in the organization’s history that a decision is made which covers a two-year time span, he stressed.

The baseline for the calculation of the adjustments is the oil production of October 2018, except for Saudi Arabia and Russia, for which the baseline has been set to be 11.0 million bpd, according to Zanganeh.

The minister finally noted that the Declaration of Cooperation was agreed by 22 OPEC and Non-OPEC countries except for Mexico, and as a result, the implementation of the agreement is conditional on the consent of Mexico.

Original News : https://www.tehrantimes.com/news/446614/OPEC-allies-reach-primary-agreement-to-balance-oil-market

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