OPEC + agrees to ease oil production cuts since May after the United States called Saudi Arabia – 02/04/2021

The OPEC + On Thursday, it decided to gradually ease deep cuts in Oil production Since May, after the new US government resumed the practice of former President Donald Trump to contact the group’s leader, Saudi Arabia.

The group, which has been making significant cuts since oil prices fell in 2020 due to the Coronavirus crisis, agreed to ease pumping restrictions by 350,000 barrels per day in May, another 350,000 barrels per day in June, and about 400,000 barrels per day in July.

Iranian Oil Minister Bijan Zanganeh confirmed that by July, the group will increase pumping by 1.1 million barrels per day.

Before Thursday, the Organization of the Petroleum Exporting Countries (OPEC) and allied producers, in a group known as OPEC +, had cut production by about 7 million barrels per day to support prices and reduce the oil surplus.

“What we did today is, I think, very conservative action,” Saudi Energy Minister Prince Abdulaziz bin Salman told a news conference after the OPEC + meeting, adding that production levels could be adjusted at the next meeting on April 28. .

He also stressed that the decision was not affected by any talks with US officials.

The minister added that the Kingdom will gradually cancel the additional voluntary reduction, which now amounts to one million barrels per day, to add 250 thousand barrels per day to production in May, another 350 thousand barrels per day in June, and 400 thousand barrels per day in July.

Brent crude futures, which tumbled after the announcement, were trading above $ 63 a barrel, up more than 20% since the start of the year.

US Energy Secretary Jennifer Granholm said early on on Twitter that she had a call with Saudi Energy Minister Abdulaziz bin Salman.

“We reaffirm the importance of international cooperation to ensure reliable and affordable energy sources for consumers,” said Granholm.

Before the meeting, OPEC + delegates said that producers would likely keep most of those cuts.

However, the environment has changed in the past 24 hours and the group is now considering whether to extend existing cuts or increase production, according to three OPEC + sources. Two sources said that the increase could reach 0.5 million barrels per day.

Trump has repeatedly used his influence to force Riyadh to revise its oil production policy, threatening to reduce or withdraw US forces from Saudi Arabia if the kingdom ignores this.