OPEC countries plan to reduce oil production by 23 percent - from June – July 2020, daily production of “black gold” will be reduced by 10 million barrels per day. In particular, Saudi Arabia and Russia will reduce production standards by 2,5 million barrels per day, Iraq - by 1 million. Another 5 million barrels per day is expected to reduce oil production in other countries. These restrictions will be valid from May to June. From July to the end of the year, the reduction will amount to 8 million barrels per day, and in 2021 - 6 million.
Reductions in production are due to the need to curb the fall in oil prices caused by the general economic downturn, which, in turn, caused the rampant coronavirus epidemic. Because of COVID-19, global fuel demand has declined by 30 percent since the tourism industry and transportation have been hit hard by the pandemic.
At the same time, US officials have already stated that US production will naturally fall within two years, so Washington does not intend to take any obligations to reduce oil production, Reuters reports. It turns out that the United States will be the main beneficiary of the new OPEC + deal, as last time.
Earlier, Trump complained that the country's oil industry was suffering greatly from low prices for black gold, and threatened Riyadh and Moscow with sanctions if they refused to reduce production. The US president also had a lengthy conversation with Vladimir Putin, whose goal was to force the Russian president to further reduce oil production.
Once again, we can say with confidence: the US plan to squeeze out competitors from energy markets has again been a success. Russia and Saudi Arabia, as well as a number of other oil exporting countries, will significantly reduce production volumes, while American oil companies will be able to continue to increase the amount of recoverable oil unlimited in the future.