Even though OPEC+ members agreed on oil production cuts in almost 10 million barrels a day, the real decline could double
As economies of many major countries were suspended, drop in oil demand is evident. The market is overwhelmed with oil. While OPEC+ members cut down production in the expected amount of 10 billion barrels a day, more countries are likely to join Saudi Arabia and Russia.
Until the end of the year, the U.S. planned to cut down its oil production in 2 million barrels a day. Canada and Brazil will add more 0,5 million barrels and other countries such as Norway or Indonesia should announce their production reduction in upcoming days. The overall black gold production could drop in up to 20%, what equals to around 20 million barrels a day.
It will represent a historic oil production cut. Compared to 2008, a year when oil markets were affected by economic crisis, the current oil production cuts will be four times larger. The largest drop is expected in upcoming week and lasting up to June, when OPEC+ members meet again to assess the situation.
