OPEC approved a further reduction of oil production

Now March 6 at the meeting of the Ministerial Committee OPEC+ they will have to reconcile this decision with countries outside OPEC, including Russia, which on March 4, at the first meeting of the Committee, opposed additional cuts. The position of our country supported the Kazakhstan is not a member of OPEC. According to the Minister of petroleum of Iran, which, according to RIA Novosti, the quota of countries not in OPEC for more production cuts will be 0.5 million barrels per day.

Russia’s second largest quota reduction – 300 thousand barrels a day. More only in Saudi Arabia – 500 thousand barrels per day. The total amount of reduction in the production of all the member countries of OPEC+ is 1.7 million barrels per day.

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At the end of last year to balance the oil market the OPEC countries+ have agreed on additional reduction of oil production. Then, the total volume of production decrease, increased by 500 thousand barrels. The Russian quota has increased by 70 thousand barrels per day.

According to experts, another increase in the quota reduction for our country will be very painful, because production will reduce the existing deposits until they are completely shutting down.

Despite the differences between the parties, the majority of experts still considers that the parties to the transaction will come to a compromise. Out of the deal now could derail the oil market, worse than it did at the end of 2014.

“Fundamentally, no one intends to terminate the agreement OPEC+”, – analyst of commodity markets of the company “Opening Broker” Oksana Lukicheva. In her opinion, it in those or other volumes will be extended until the end of the year. Moreover, Pisano total long-term agreement in the form of a Charter about balancing the oil market, said Lukichev.

For additional reduction of production is first and foremost, Saudi Arabia – the leader of OPEC countries. The main opponent of quota increases – Russia, which can be called the leader among the countries of OPEC. The irony is that these countries together produce almost half of the reduction of oil production. And will have to negotiate them, primarily among themselves.

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Experts believe that a compromise will be reached. Just remember that our country went to a meeting in December last year, the deletion of the quota reduction gas condensate, due to which Russia has been able to fulfill the terms of the reduction in 2019. Not excluded, and some counter steps from our side.

“the Question is not in keeping OPEC+. We are talking about measures to support oil prices. In the absence of the appearance of obvious signs of rising demand for “black gold” in the near future, the likelihood of concessions on the part of Russia is quite high”, – the senior analyst of “Alfa Capital” Maxim Biryukov.