BAKU, Azerbaijan, April 13
By Leman Zeynalova - Trend:
OPEC+ deal will foster increased stability in energy markets, reads the statement issued by American Petroleum Institute President and CEO Mike Sommers, Trend reports.
"We welcome today’s announcement of an agreement by other producing nations to follow the lead of the global marketplace – and U.S. producers – to reduce supply to align with lower energy demand as result of the pandemic. This is a significant agreement that will foster increased stability in energy markets to the benefit of both American energy consumers and producers. We commend the president’s leadership and his administration’s diplomatic engagement to urge nations to bring global oil supply in line with the lower energy demand as a result of the pandemic.
"In the U.S., market conditions have led U.S. producers to reduce U.S. oil production to meet historic drops in demand. While the U.S. today leads the world in daily oil production, oil is produced, refined, used and traded across the globe, and most of the world’s oil is produced by foreign government owned entities – some of whom announced oil production increases last month just as global energy use was decreasing due to the pandemic.
"Prior to COVID-19, the world demanded 100 million barrels of oil per day for transportation, industrial operations, manufacturing and byproducts used in every sector of the global economy – from paints and asphalts to makeup and iPhones – and projections show long-term demand for oil and natural gas around the world remain strong. Significant challenges remain in the weeks and months ahead for our sector and nearly every other; however, U.S. oil and natural gas – and the American workers who produce, transport, service, refine and ship it – will be critical to enabling our economic recovery."
The 10th (Extraordinary) OPEC and non-OPEC Ministerial Meeting held via videoconference, 12 April 2020 decided to adjust downwards the overall crude oil production by 9.7 mb/d, starting on 1 May 2020, for an initial period of two months that concludes on 30 June 2020.
For the subsequent period of 6 months, from 1 July 2020 to 31 December 2020, the total adjustment agreed will be 7.7 mb/d. It will be followed by a 5.8 mb/d adjustment for a period of 16 months, from 1 January 2021 to 30 April 2022. The baseline for the calculation of the adjustments is the oil production of October 2018, except for the Kingdom of Saudi Arabia and The Russian Federation, both with the same baseline level of 11.0 mb/d. The agreement will be valid until 30 April 2022, however, the extension of this agreement will be reviewed during December 2021.
---
Follow the author on Twitter: @Lyaman_Zeyn