According to the head of the Ministry Alexander Novak, OPEC+ decided to extend the current level of reduction including due to significant excess supplies of oil on the world market, despite the possible shortages in some time.
the Minister stressed that all countries involved in the transaction to reduce production, confirmed the commitment to execute 100% of its requirements. By decision of the Ministerial Committee OPEC+, countries that have not fulfilled commitments to reduce production at 100% should do so in the coming months, and also to offset the amounts outstanding production decrease in July-September of this year.
To date, 100% of the deal was fulfilled, Saudi Arabia, UAE and Kuwait. Russia fulfilled its obligations by 96%. The main “violators” of the terms of OPEC was Iraq, which may have reduced production to less than half of the quota, Nigeria and Azerbaijan, which reduced the prey only half of the required volumes, and Algeria, which reduced production by only 7% of its quota.
Quotes of the barrel received a powerful incentive for further growth, and oil market additional support for the early recovery of the balance of supply and demand.
Only on the expectations of this meeting, oil prices rose in the last week of may and first week of June more than 10%, and overcame the barrier of $ 40 per barrel.
According to estimates by the Chairman of the OPEC energy Minister of Algeria Mohammed Arkaba, the demand for oil by the end of 2020 will fall to 9.1 million tons compared to the year 2019, and reserves from January to June 2020 will rise to a record 1.5 billion barrels. But in July this year, the parties to the transaction expect balanced supply and demand in the oil market.
