Today, OPEC+, a 23-nation alliance, met virtually to reach a historic deal. To stabilize the markets, OPEC+ countries have agreed to production cuts.
OPEC+ and other oil-producing nations outside the alliance are cooperating to offset the coronavirus pandemic’s impact on the oil market. In the closed session, members agreed to reduce output by 10 million barrels per day from May to June. Iran, Libya and Venezuela are exempted from cutting production.
The agreement anticipates 5 million bpd cuts from outside the OPEC+ group. Additional agreements include an 8 million bpd cut from July to December and a 6 million bpd cut beginning in January 2021.
Today’s agreement sets the stage for tomorrow’s G-20 energy ministers meeting as they work to ensure oil markets stabilize. The G-20 will address the near-term financial pressure that oil-producing nations face and longer-term damage to infrastructure from lack of investment due to the crisis. The energy-focused discussions are seeking to support international financial stability and global peace.