21:28 GMT31 May 2020
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    OPEC+ nations previously adopted a declaration of cooperation that stipulates gradual cuts of oil production in three stages from the October 2018 level. Nevertheless, Mexico decided to withdraw from the talks on a new oil output reduction deal.

    Russia’s President Vladimir Putin sees the new OPEC+ document on oil output cuts as very positive, as it was a compromise which brought together 22 out of 23 countries, Kremlin Spokesman Dmitry Peskov said Friday.

    According to Peskov, the talks with Mexico continue.

    "We hope that the parameters agreed to by the other 22 countries will be agreed [upon with Mexico as well] and we are certain that this document will have a very positive impact on the international markets and it will be strengthened after Mexico joins," the Kremlin spokesman said.

    There are "no losers" in the new agreement, Peskov said.

    According to the spokesman, it is to the advantage of oil producers and oil importers and the global economy in general, as it would have been in chaos if the deal had not come through..

    When asked if Russia's refusal to deepen the production cuts in March had been a mistake, the spokesman stated that it was in no way a mistake.

    Peskov stressed that Russia remained consistent on the development of international cooperation and the interaction of oil producing countries to stabilise the market, especially in times of such unprecedented difficulty experienced right now.

    In a parallel development, President Andres Manuel Lopez Obrador said that he had spoken with President Trump and they agreed to reduce oil production by 100,000 barrels per day. The US, in turn, promised to additionally reduce production by 250,000 barrels per day in order to help Mexico, the president added.

    Meanwhile, OPEC Secretary General Mohammed Barkindo told G20 ministers that the alliance needs to enhance cooperation to stabilise the oil market. The official added the he welcomed the participation of more countries in these efforts.

    "The success of this historic agreement depends on the full and timely participation of all producers. Everyone has a responsibility to play their part. The sustained stability of the global oil market is a shared responsibility. We, therefore, need to broaden this cooperation and welcome the support of others. Complex challenges, need comprehensive and ‘global’ solutions," Barkindo told the Extraordinary G20 Energy Ministers Meeting.

    G20 Ministers Hold Meeting on Oil Market Stabilisation

    G20 ministers have launched talks on stabilising the oil market as the COVID-19 pandemic continues to rage across the globe, a source familiar with the matter revealed on Friday.

    The talks are being held via a video conference. Some of the G20 nations are also members of OPEC+, which held its conference on Thursday and agreed on a three-stage reduction of oil production.

    The Saudi Energy Ministry wrote on Twitter that Energy Minister Abdulaziz bin Salman Al Saud is chairing the G20 meeting. The ministry's official account shared a quote from his opening speech, in which he said that reliable and affordable energy supplies are essential to enabling basic services, including health care, and to ensuring the ability to drive economic recovery efforts.

    ​The OPEC+ nations have adopted a new declaration on cooperation to stabilise the oil market. But the document was adopted under the condition that Mexico should agree with its quotas. However, Mexico withdrew from the meeting without a positive answer. The new deal involves a three-stage reduction in oil production by the alliance from the level of October 2018: by 10 million barrels per day in May-June, by 8 million - in July-December and by 6 million - from January 2021 to the end of April 2022.

    The alliance intended to continue the discussion and convince Mexico to join the deal. At the same time, OPEC+ considers it necessary for other countries to cooperate as well to save the oil market.

    OPEC+ Deal Collapse

    In March, OPEC+ countries failed to bridge their differences on the need to further slash oil production amid the coronavirus pandemic.

    Restrictions were removed as the deal fell through, which prompted a collapse in the market, in addition to a global drop in demand driven by the coronavirus crisis.

    Russia suggested leaving output cuts at the same levels, while Saudi Arabia and its allies pushed for additional cuts.

    Russia rejected the Saudi proposal, prompting Riyadh to abandon the originally agreed cuts and announced a 25 percent increase in production.

    Tags:
    cuts, production, market, Oil, G20
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