By Eurasia Business News – December 3, 2020
Oil rig platform – Photo credit : pixabay
The OPEC + countries have agreed to increase oil output by 500,000 barrels per day from January 2021.
At the same time, every month the Ministers of OPEC+ will discuss and decide on a further increase or not, but any increase will not be able to exceed 0.5 million bpd.
“The countries participating in the OPEC + agreement have agreed to hold monthly ministerial meetings starting in January 2021 to review the current state of the oil market and to adjust the further level of restrictions” said the Ministry of Energy of Kazakhstan.
The total limitation of oil production of the OPEC + countries in January 2021 will be 7.2 million barrels per day from the base level.
The OPEC + countries will continue to compensate for the unreduced oil production under the oil deal until March 2021. Earlier, they allowed the “losing parties” to compensate for the volumes not reduced in May-July 2020 within the framework of the OPEC + deal, reducing production in addition to their quotas during August-September, but even in these months some countries, such as Iraq, did not fully complied with the agreement. After that, the “losing parties” were allowed to compensate for the volumes until the end of the year.
Nigeria, Gabon and Congo are also among the countries that have not fulfilled their obligations under the deal. At the same time, Iraq and Nigeria, according to the latest data, again increased production in October.
Read also : Leading oil producers confirmed historic OPEC+ deal to cut oil output
On March 6, the OPEC + member countries could not agree on reduction of oil production. As a result, the agreement in force fell apart. Following this failure, the Kingdom of Saudi Arabia increased its oil output to 10-12 million barrels per day and set lower prices for its oil to put pressure on Russia, another leading oil producer. Both countries could find compromise during the negotiations that led to the historic deal of April 12, providing for cut starting from May 1.
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