VIENNA: OPEC members, led by Saudi Arabia, and other key oil producers agreed Saturday to extend historic output cuts through July, as oil prices tentatively recover and Covid-19 (coronavirus) lockdowns ease.
The 13-member cartel and its allies, notably Russia, decided to extend by a month deep May and June cuts agreed in April to boost prices, the Organisation of the Petroleum Exporting Countries said in a statement.
"All participating countries... agreed the option of extending the first phase of the production adjustments pertaining in May and June by one further month," the OPEC statement said. "Today's deal is a positive development and, unless a second Covid-19 wave hits the world, it will be the backbone of a quick recovery for the energy industry," Bjornar Tonhaugen of Rystad Energy said, referring to a feared fresh wave of new coronavirus infections.
According to data intelligence company Kpler, OPEC+ reduced output by around 8.6 mbpd in May, less than planned, with Iraq and Nigeria seen as the most resistant. "There are other countries that extended the cuts to July. We told them no, that we are maintaining the agreement signed in April. There is no problem," Mexico's Energy Minister Rocio Nahle told reporters during a visit to a petrochemical plant in Veracruz state.
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