(Introductory remarks delivered by HE Mohammad Sanusi Barkindo OPEC Secretary General to the 9th (Extraordinary) #OPEC and non-OPEC Ministerial Meeting via webinar. Via @OPECSecratariat).
Nearly 40 countries directly tied to global oil production and consumption met via video conference last week to discuss possible cuts. The Organization of Petroleum Exporting Countries and its allies (OPEC+) agreed to cut 9.7million barrels per day (bpd), just below the initial proposed 10 million bpd.
This is an immense and unprecedented cut in production. However, roughly a quarter of daily petroleum usage has been lost since coronavirus lockdowns began, which equates to roughly
20 – 35 million bpd, according to the International Energy Agency (IEA).
IHS Markit Research actually
predicted this cut at the end of March 2020 and further forecast that oil demand in Q2 2020 will be 16.4 million bpd less than a year ago, with oil production “projected to decline in every region of the world, with OPEC members, Russia, and the United States among the hardest hit”.
Energy ministers of the G20 also met via video conference to delve into the situation even further. Alberta’s Energy Minister Sonya Savage represented Canadian interests at the meeting. The province’s premier, Jason Kenny said in a televised address earlier in April that there is a “very real possibility” of negative prices for energy products coming from Alberta. He warned that measures to deal with this crisis could potentially triple the province’s budget deficit in 2020 to almost triple to $20 billion (CAD).
Data gathered from OPEC, the IEA, the governments of Russia and Kazakhstan, as well as the US Energy Information Administration, offers a look at the latest positions.
The top five producers:
- United States - 13 million bpd
- Saudi Arabia - 12 million bpd
- Russia - 11.29 million bpd
- Canada - 5.78 million bpd
- Iraq - 4.62 million bpd
Brazil, Norway, Kazakhstan, Nigeria, Kuwait and the United Arab Emirates make up for nearly 16 million bpd on top of this.
While this cut is massive, is it enough to support the industry in this time of the OPEC vs Russia strife, coupled with the effects of the COVID-19 coronavirus pandemic spread? Let us know your thoughts in the comments below.
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