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Oil producers from G20 have agreed to reduce their combined crude oil output by 3.7 million bpd, according to Iran’s Oil Minister, Bijan Zanganeh, as quoted by IRNA.
G20 met on Friday to discuss oil production, but reports from that day revealed that the group had failed to agree on a specific number.
“To underpin global economic recovery and to safeguard our energy markets, we commit to work together to develop collaborative policy responses,” the group’s energy ministers said in an official statement. “We recognize the commitment of some producers to stabilize energy markets. We acknowledge the importance of international cooperation in ensuring the resilience of energy systems.”
This is indeed way too vague for anyone’s comfort, although some hailed the G20’s declaration of support for the OPEC+ cuts as a positive development. Such broad support for an oil production-cutting effort is unprecedented, just like the crisis that prompted it.
Still, there is a figure for at least one G20 member: the United States.
U.S. President Trump spoke with his Mexican counterpart on Friday after Mexico refused to sign up for cuts of 400,000 bpd under the OPEC+ agreement. Following his talks with Trump, Mexico’s Andres Manuel Lopez Obrador said that the U.S. would implement cuts of 250,000 bpd to help Mexico, which will cut 100,000 bpd. Trump confirmed the agreement, saying Mexico will “reimburse” the U.S. when it can.
Besides this 250,000 bpd cut, U.S. oil production could be lowered by as much as 2 million bpd by the end of the year, Energy Secretary Dan Brouillette said at the G20 meeting, as quoted by the Financial Times.
“This is a time for all nations to seriously examine what each can do to correct the supply/demand imbalance,” Brouillette said in what could be seen as a departure from the official White House position until recently that the U.S. did not need to cut oil production on purpose because low prices would force a decline in production anyway.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.