Iran Press/Middle East: The statement came after OPEC and non-OPEC allies, often referred to as OPEC+, agreed on Saturday to extend the group’s deepest round of production cuts in history.
The cuts are meant to take roughly 10% of oil supplies off the market through to the end of next month.
International benchmark Brent crude futures traded at $41.72 a barrel, down around 1.3%, while West Texas Intermediate futures stood at $38.88, over 1.6% lower.
Saudi Arabia and non-OPEC leader Russia said Monday that the success of the energy alliance’s latest production cuts relied on all members complying with the terms of the deal.
Those that failed to conform to the OPEC+ deal in May and June should compensate with extra cuts from July through to September, Prince Abdulaziz said.
Russian Energy Minister Alexander Novak said via a translator that he fully agreed with his Saudi counterpart. “I can say that overall conformity levels are extremely high, considering the magnitude of the cuts and how bad the situation is.”
“We have spent a lot of time discussing full conformity and how this will be compensated because the success of the deal and the success of our efforts rests on all countries doing their part,” he added.
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OPEC and allies agree to extend record production cut
According to CNBC, oil prices have surged since some of the world’s most powerful oil producers brought in a production cut of 9.7 million barrels per day from May 1. The move was designed to prop up prices at a time when the coronavirus pandemic had led to an unprecedented demand shock in energy markets.
The International Energy Agency estimated that roughly 25% of demand was drained from the market in April as confinement measures brought mobility to a near standstill for billions of people across the globe.
The output cuts from OPEC+ were initially scheduled to be scaled back to 7.7 million barrels per day from July 1 through to the end of the year.
But the new deal, secured over the weekend, means the group will now cut 9.6 million barrels per day through to the end of July. The figure is 100,000 barrels per day lower than the previous agreement because Mexico said it remained committed to the terms of the original deal and subsequent reduction in cuts.
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