Member countries of the oil cartel agreed on oil production cuts in 1,5 billion barrels daily
OPEC now awaits Russia’s attitute. Yet, there’s no signals that the Kremlin would not agree with the deal.
Such oil production cuts are deepest since financial crisis in 2008. Furthermore, member countries agreed the measures will be valid till the end of 2020. Originally, it was exptected that OPEC would lower the black gold production to 600,000 barrels and such measures were supposed to last till June 2020.
OPEC awaits statement of Russia and Kazakhstan, which are countries belonging to OPEC+ group since 2017. Both countries are expected to agree with the deal. Yet, it’s hard to predict if the confirmed measures actually reduce oil production and whether oil price drops.
As the measures concern oil price decline, drone attack on Saudi Aramco oil facility from September 2019 should be mentioned. The attack caused 5% drop in daily oil extraction, which represents about 5 million barrels. And that is around four times the volume in which OPEC now aims to cut oil production. Nevertheless, oil price was hardly affected by the attack.