After more than 10 hours of video talks, the unexpectedly smooth OPEC + emergency meeting at the beginning failed to reach a final collaborative production reduction agreement, and the production reduction was not as close as the market expected. In the early hours of April 10th, Beijing time, international crude oil futures prices fluctuated violently with the progress of negotiations. After the two major protagonists of the price war, Saudi Arabia and Russia, which had been quarreling before, quickly reached a consensus on deep production cuts, WTI and Brent crude oil surged 10%. But since then more details of the reduction in output have flowed out, and oil prices have closed down to smooth out the daily gains, and negotiations are still in progress at the close.
According to the summary communiqué issued after the OPEC meeting, the ninth special meeting of OPEC and non-OPEC ministerial level (hereinafter referred to as OPEC +) was held on Thursday, in view of the current fundamentals and According to the market consensus, the vast majority of participating countries agreed to a phased framework agreement to reduce production: from May 1 to June 30, the total crude oil output will be reduced by 10 million barrels per day; from July 1 to the present During the six months at the end of the year, the output was reduced by 8 million barrels; during the 16-month period from January 2020 to April 30, 2022, it was agreed to reduce production by 6 million barrels per day. The above production reduction share is calculated based on the crude oil production in October 2018, but Saudi Arabia and Russia are special. The production reduction benchmark is 11 million barrels per day, and the production reduction quota is 23% of the benchmark. Iran, Libya and Venezuela still exempt production cuts .
The communiqué appealed to other major oil-producing countries to contribute to the efforts to stabilize the market. OPEC + will hold another online meeting on June 10 to decide on the further actions required to balance the market. In December 2021, the above production reduction plan will be reviewed. The OPEC representative said that OPEC will be responsible for 60% of the 10 million barrels / day output reduction in the first two months, and the rest will be implemented by the alliance.
However, this largest production reduction agreement in history has a prerequisite for its final entry into force: it must be conditional on Mexico ’s consent. After more than 9 hours of lengthy negotiations, as countries approached the agreement, an unexpected situation occurred: the Mexican delegation left because of disagreement with the agreement and the meeting continued. Mexican Energy Minister Rocio Nahle subsequently tweeted that Mexico is only prepared to reduce 100,000 barrels of crude oil production per day in the next two months, from 1.681 million barrels of daily output in March to 1.681 million barrels-but this is much lower than OPEC + proposed The requirement of 400,000 barrels per day. An OPEC representative said that without Mexico ’s participation, OPEC + will not reduce production and does not plan to hold another meeting on Friday, but will focus on the G20 Energy Ministers ’meeting held on that day.
planned for Beijing time 4