Starting April 1, members of the Organization of Petroleum Exporting Countries intend to conduct production at maximum capacity.
Since April 1, the OPEC + deal is no longer in effect, according to which the Organization of Petroleum Exporting Countries and its allies were to limit oil production. It is reported by Reuters.
The contract was valid for three years, it said that the production level was limited to 2.1 million barrels of oil per day, mainly in Saudi Arabia.
Starting April 1, oil producers intend to produce it “at maximum capacity.”
The agency notes that “oil demand is rapidly falling” due to the spread of coronavirus in the world.
March 5 OPEC, which includes 14 oil producing countries: Algeria, Angola, Venezuela, Gabon, Iran, Iraq, Congo, Kuwait, Libya, United Arab Emirates, Nigeria, Saudi Arabia, Equatorial Guinea and Ecuador – agreed on an additional limitation of oil production by 1.5 million barrels per day due to a drop in demand for it due to coronavirus. It was expected that March 6 to a deal Russia will join, but the parties failed to agree on the extension of the existing or the conclusion of a new agreement.
Until April 1, an agreement was reached between OPEC member countries and the organization’s partners, including Russia, to reduce oil production by 1.7 million barrels per day.
Amid unsuccessful negotiations, Saudi Arabia, according to Bloomberg sources, decided to “enter into a total price war” and increase production from the current 9 million to 12 million barrels per day. This, according to analysts polled by the agency, “will lead to chaos in the oil market.”
March 9, the cost of North Sea Brent oil fell by 30% – before $ 33 per barrel. Such a drop in prices has been the strongest since 1991 – since the Persian Gulf War. After the collapse of oil prices in the Russian Federation, the ruble began to rapidly fall in price.
On March 30, the cost of a barrel of Russian Urals oil in the Northwest Europe market dropped to $ 13 per barrel, the lowest level since March 1999.
April 1, Brent crude is trading at $ 25.4 per barrel.