15:07 GMT30 May 2020
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    Earlier, the OPEC+ group of oil producing nations adopted a declaration envisioning a three-stage reduction in crude output which, if implemented, would cut global oil output by a whopping 23 percent, or roughly 10 million barrels per day (pbd).

    Mexico will cut oil production by 100,000 bpd, with the production cut coordinated with the US, which has pledged an additional 250,000 bpd drop in output to allow Mexico to make its contribution to global output restrictions, President Andres Manuel Lopez Obrador has said.

    "I have talked to President Trump, and we have agreed to reduce production by 100,000 barrels per day. The US has promised to additionally reduce production by 250,000 barrels per day in order to help Mexico," Obrador said, speaking at a press conference on Friday.

    The move comes a day after Mexico became the sole major oil producer that refused to join cuts agreed upon by OPEC+, and indicated that it would be prepared to reduce output only by 100,000 barrels, rather than a phased 400,000 bpd cut proposed by OPEC+. Mexico City's position prompted Kuwait's oil ministry to accuse the country of "obstructing" a global agreement on oil cuts. Meanwhile, a source in one of the delegations present at the OPEC+ talks told Sputnik that Saudi Arabia would not accept a deal without Mexican involvement. On Friday, Kremlin spokesman Dmitry Peskov said that "work" was underway to persuade Mexico to join the deal.

    President Obrador has been hesitant to make cuts to domestic output after making increasing the national oil company Pemex's production a key component of his economic programme. With its oil production averaging 2.18 million bpd last year, Mexico joined the ranks of the twelve largest oil producers in the world after the United States, Saudi Arabia, Russia, Iraq, Iran, China, Canada, the UAE, Kuwait, Brazil and Venezuela.
    Mexican state oil firm Pemex's Cadereyta refinery in Cadereyta
    © REUTERS / Daniel Becerril
    Mexican state oil firm Pemex's Cadereyta refinery in Cadereyta

    The Trump administration has pressured OPEC+ members Saudi Arabia and Russia to make a deal on oil output cuts, reportedly considering tariffs against the two countries' energy supplies, and even new anti-Russian sanctions in the event that an agreement could not be reached. Washington itself has been reluctant to join OPEC+'s coordinated cuts, however, insisting that its output would fall 'naturally' over the next two years through market forces, with the US already reporting that it is cutting about 2 million bpd. Some countries have expressed concern about the lack of a formal US commitment, fearing that America may seek to poach new markets as the rest of the world reduces output. Saudi Energy Minister Prince Abdulaziz bin Salman said Friday that he expects the US, Canada, Brazil and other non-OPEC+ members to join the effort to stabilise the global oil market "using their own approaches". Speaking at an emergency G20 summit on Friday, Russian President Vladimir Putin said Moscow sees the new OPEC+ deal as an effective compromise, with no country coming out of the agreement a "loser."

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