10 Apr 2020 13:24

Russia will have to cut oil output by 1.8 mln bpd under OPEC+ deal

MOSCOW. April 10 (Interfax) - OPEC+ countries agreed on Thursday to cut oil production by 10 million barrels per day from the October 2018 level, although for Russia and Saudi Arabia the baseline for the cut will be 11 million bpd, a communique from the meeting seen by Interfax shows.

OPEC+ countries, the communique said, produced 43.85 million bpd in October 2018, and IEA data show that they produced 41.13 million bpd in February 2020. Under the agreement, all the countries will reduce production by 23% from the baseline of October 2018, except Russia and Saudi Arabia.

However, it is not possible to compare with production in April or March of 2020, as not all countries have provided data.

Saudi Arabia is supposed to cut production to 8.5 million bpd in May-June. If the country is producing 12 million-12.3 million bpd in April, the cut will amount to 3.5 million-3.8 million bpd from the current level, but only 1.2 million bpd from the March figure.

Russia is producing 11.3 million bpd so far this month, including condensate, which is not counted in the deal. Without condensate, it is producing 10.3 million bpd. Russia is also supposed to cut production to 8.5 million bpd in May-June, so it will have to reduce oil output by about 1.8 million bpd.

This deal will go into effect if OPEC+ countries manage to persuade Mexico, which is a member of the OPEC+ alliance, to agree to the cuts.