Countries agree to reduce overall crude oil production

13 Apr, 2020

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HRH Prince Abdul Aziz Bin Salman, Saudi Arabia’s Minister of Energy. Image source: OPEC on twitter.

On 12 April 2020, the 10th (Extraordinary) OPEC and non-OPEC Ministerial Meeting was held via video conference under the Chairmanship of HRH Prince Abdul Aziz Bin Salman, Saudi Arabia’s Minister of Energy, and co-Chair HE Alexander Novak, Minister of Energy of the Russian Federation.

In light of the current market, the Participating Countries agreed to reduce their overall crude oil production by 10 million barrels a day (mb/d) starting on 1 May 2020, for an initial period of two months until 30 June 2020.

For the subsequent period of six months, from 1 July 2020 to 31 December 2020, production will be 8 mb/d. It will be followed by a 6 mb/d adjustment for a period of 16 months, from 1 January 2021 to 30 April 2022.

The reduction has been based on 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 mb/d. The agreement will be valid until 30 April 2022, however, the agreement will be reviewed during December 2021.

The meeting also reaffirmed the continued commitment of the participating producing countries in the ‘Declaration of Cooperation’ (DoC) to a stable market, the mutual interest of producing nations, the efficient, economic and secure supply to consumers, and a fair return on invested capital.

The meeting emphasised the ‘important and responsible decision’ to adjustment production.

Additionally, the meeting acknowledged the G20 Extraordinary Energy Ministers Meeting, which was held on 10 April, and recognised the commitment of the producers in the OPEC+ group to stabilise energy markets and acknowledged the importance of international cooperation in ensuring the resilience of energy systems.

All Participating Countries agreed to:

Reaffirm the Framework of the DoC, signed on 10 December 2016 and further endorsed in subsequent meetings; as well as the Charter of Cooperation, signed on 2 July 2019.

Reduce 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.

Call upon all major producers to provide commensurate and timely contributions to the efforts aimed at stabilising the oil market.

Reaffirm and extend the mandate of the Joint Ministerial Monitoring Committee and its membership, to closely review general market conditions, oil production levels and the level of conformity with the DoC and this Statement, assisted by the Joint Technical Committee and the OPEC Secretariat.

Reaffirm that the DoC conformity is to be monitored considering crude oil production, based on the information from secondary sources, according to the methodology applied for OPEC Member Countries.