the Deal begins to operate at the peak of the crisis in the oil market caused by a coronavirus pandemic, and quarantine measures taken to prevent its spread. Energy Minister Alexander Novak estimated the reduction in oil demand 25-30 million barrels per day relative to the level of last year.
At a meeting with President Vladimir Putin, head of the energy Ministry of Russia noted that global markets have seen unprecedented volatility, but also contains traces of positive trends.
“In Northern and Central Europe falling demand for petroleum products decreased by 10-15%, i.e. from 70% to 55-60%. We also see the statements of several countries on the gradual easing of restrictions in may. With this in mind and the start of the agreement OPEC+ imbalance in the second half of may should decrease. There are optimistic estimates of the stabilization of the situation on the world markets, starting from the second half of the year,” said the Minister.
For all the parties to the transaction, the reduction is determined from the level of production October 2018. For the two largest producers of “black gold” has officially joined the agreement – Russia and Saudi Arabia, the point of the report is taken the figure of 11 million barrels per day, it would be to calculate the reduction. Both countries will have to reduce production to 8.5 million barrels per day each. Reduction of oil production by Russia will amount to about 1.8 million barrels per day.
because of global falling demand for “black gold” this time the agreement OPEC+ unofficially supported the main, in the past, opponents of the organized reduction of production – USA, Canada, Norway, Brazil and some other countries. Largest oil producer – the United States has already said about the natural production decline of 3 million barrels per day. Washington also promised to cut production by 300 thousand barrels in the quota of Mexico. According to experts, if prices remain for some time below $ 30 per barrel, production in the United States will continue to decline and the decline in production may amount to 5-6 million barrels per day.
as a result, the total decline in the production of all countries in may and June may reach 15-20 million barrels a day. The withdrawal of such amounts from the market should help restore the balance of supply and demand. But the stabilization process appears to be slow, experts believe that the expected growth in the consumption of oil and petroleum products will only be possible from the second half of 2020.
