“Despite the economic and financial circumstances facing Iraq, the country maintains the agreement,” OPEC spokesman Assem Jihad, a spokesman for Iraq`s oil ministry, said on Saturday. According to the initial agreement reached on 12 April by the joint producer group OPEC Plus, production was expected to increase gradually after June. “Through the grace of Allah, and then with wise leadership, continuous efforts and ongoing conversations since dawn on Friday, we now announce the conclusion of the historic agreement to reduce OPEC members` production by about 10 million barrels of oil per day from May 1, 2020,” Dr. al-Fadhel wrote in a tweet. Oil ministers from the Organization of petroleum exporting countries and other Russian-led producers met via video conference on Saturday and agreed to continue to cut 9.7 million barrels per day – or about 10 percent of world production in normal times – until July, according to an OPEC press release. The talks were complicated by disagreements between Russia and Saudi Arabia, but on April 2, oil prices rose after President Trump said he expected the two countries to end their feud. Sunday`s agreement follows a busy week for oil ministers. On Friday, the Group of 20 held a separate virtual meeting to discuss the state of global oil markets, sparking speculation that further production cuts might be possible. (The G20 includes producers such as Canada and the United States who are not participating in OPEC reductions) However, the meeting ended without any new commitments announced publicly. OPEC and other Russian-led oil nations, trying to measure the strength of the global economy as coronavirus continues to rage but with vaccines on the horizon, reached a compromise on Thursday to moderately increase production in January. He added: “Algeria is ready to reduce its production from 1 May, in accordance with the agreement.” Mohamed Arkab, Algerian energy minister and president of the OPEC conference, said in a statement that Algeria had reduced its oil production in full compliance with the agreement reached on 12 April 2020 and that he was convinced that all countries that signed the agreement would respect the voluntary commitments. The agreement is massive and represents the largest drop in production in OPEC history. The reduction is more than twice as large as the 4.2 million barrels per day that the oil cartel made through a series of budget cuts during the 2008 financial crisis.
However, analysts say this is likely to be overshadowed by the magnitude of the loss of demand in the grip of the pandemic. The agreements of the 9th and 10 (extraordinary) OPEC and non-OPEC ministerial meetings will come into force on May 1, 2020. Under the agreement, members of the Organization of Petroleum Exporting Countries, along with Russia and other countries, will increase production by 500,000 barrels per day in January and possibly a similar amount in the following months. The increase, less than 1% of the global oil market, comes at a time when demand is still under pressure from the coronavirus pandemic. The OPEC president stressed that conditions and prospects in the oil market are worrying all producers and require full compliance with the voluntary production reduction agreement. Saudi Arabia and Russia agreed on Sunday with other oil-producing nations to cut production by 9.7 million barrels per day for the next two months to stem a drop in oil prices caused by the coronavirus pandemic and the feud between Moscow and Riyadh.