Uche Usim, Abuja
The Organisation of Petroleum Exporting Countries and its oil-producing allies (OPEC+) rose from a meeting on Saturday in Vienna, Austria, with a firm agreement to extend the historic 9.7 million barrels per day crude oil production cut for an additional month.
The decision, finalised during a video-conference, aligns with OPEC+’s broad strategic plan of gradually stabilizing the global oil industry that has been severely disrupted by the COVID-19 pestilence.
The 9.7 million bpd cut, which extends to the end of July, will be reviewed on a monthly basis, even as the next meeting has been scheduled for June 18th.
In his remarks, Saudi Arabia’s Energy Minister Prince Abdulaziz admitted that oil-producing countries were not out of danger yet, in spite of the gradual climb of oil prices.
He said: ‘Today, we have grounds to be cautiously optimistic about the future, but we are not out of the woods yet and challenges ahead remain to be seen.’
He, however, urged the group to cement their bond of unity and act quickly to sustain the recovery.
‘Together we are stronger, together we can restore stability to oil markets and help rebuild the global economy,’ he added.
Ahead of the meeting, the oil market mirrored a fevered optimism over an agreement, just as the West Texas Intermediate jumped 5.72% to settle at $39.55, while international benchmark Brent crude gained 5.78% to settle at $42.30 on Friday.
The OPEC+ admitted that nations not sticking to their allocated quotas remained a challenge.
As Saturday’s meeting got underway Assem Jihad, Iraq’s Ministry of Oil Spokesperson, said in a statement that “despite the economic and financial circumstances that Iraq is facing, the country remains committed to the agreement.”
Iraq, it was gathered, will implement further production curbs from July to September in an effort to make up for prior non-compliance that did not go down well with OPEC+.
Under the prior agreement, which was set during an extraordinary multi-day meeting in April, the 23-member group began curbing production by 9.7 million bpd on May 1, which was slated to extend through the end of June. The cuts would then begin to taper. From July through the end of 2020, 7.7 million bpd would be taken offline, followed by 5.8 million bpd from January 2021 through April 2022.
The crude production cut is the largest in history.