Riyadh: The G20 Energy Minister promised to work together on the basis of ensuring the “market stability” of oil. The statement was made at a virtual summit hosted by Saudi Arabia, but did not mention production cuts.
The summit was held after OPEC and its allies reached an impasse in support of crude oil price cuts. Mexico rejected the proposed restrictions.
The stalemate casts doubt on efforts to raise oil prices, as the coronavirus pandemic in declining demand and the Saudi-Russian price war have shaken global markets and caused oil prices to fall to a low of nearly a decade.
Subsequent G20 talks are expected to allow the group to reach a broader agreement with the group’s non-OPEC countries including Mexico, the United States and Canada, but the group’s final statement did not mention the reduction.
“We commit to ensure that the energy sector continues to make a full, effective contribution to overcoming COVID-19 and powering the subsequent global recovery,” the statement said.
“We commit to work together in the spirit of solidarity on immediate, concrete actions to address these issues in a time of unprecedented international emergency.
“We commit to take all the necessary and immediate measures to ensure energy market stability.”
Mexico is the only persistence measure in the multilateral agreement led by the Organization of Petroleum Exporting Countries (OPEC), which will cut daily production by 10 million barrels in May and June. According to the agreement, the reduction will gradually decrease until April 2022.
According to the agreement, Mexico is expected to cut 400,000 barrels a day, but the country refused in the overnight negotiations.
But Mexican President Andrés Manuel Lopez Obrador said he has reached an agreement with US President Donald Trump to reduce production by only 100,000 barrels per day.
Trump confirmed the deal, saying the United States will “make up the difference” by cutting “some US production”.
