G20 Energy Ministers have failed to finalize a pact on oil production cut after the OPEC+ countries decided to reduce fuel production by 23 per cent…reports Asian Lite News
The COVID-19 pandemic and the price war that began in March between Russia and Saudi Arabia after failing to reach a consensus on maintaining the oil output cuts on the lines of the OPEC+ deal resulted in the lowest per barrel cost in two decades, reports Efe news.
However, the differences between the oil-producing nations persist despite agreeing to limit the production for the next two years – with an initial reduction of 10 million barrels a day in May and June.
These differences led to a delay in the release of the concluding statement of the G20 meeting through videoconference on Friday by 11 hours.
The text in the final statement merely mentions the commitment of the countries with no significant advances.
The statement said the member countries were committed to preserving financial stability to ensure the stronger recovery of all the affected countries from the current crisis.
“The unprecedented COVID-19 pandemic is a powerful reminder of our interconnectedness and vulnerabilities. The virus respects no borders. We are strongly committed to presenting a united front against this common threat,” said the statement.
It said combating the pandemic called for “a transparent, robust, coordinated, large-scale and science-based global response in the spirit of solidarity”.
“We express our readiness to convene again as the situation requires. Global action, solidarity, and international cooperation are more than ever necessary to address this pandemic,” the statement said.
“We are currently undertaking immediate and vigorous measures to support our economies; protect workers, businesses—especially micro-, small and medium-sized enterprises — and the sectors most affected; and shield the vulnerable through adequate social protection.”
The statement said the G20 countries pledged to inject over $5 trillion into the global economy, as part of targeted fiscal policy, economic measures, and guarantee schemes to counteract the social, economic and financial impacts of the pandemic
Saudi Arabia’s Energy Minister Abdel Abdulaziz bin Salman warned in his opening statement global economy needed an affordable energy supply for the recovery.
The OPEC+ agreement reached on Thursday sought a commitment to limiting its oil production for the next two years with gradually changing figures.
The reduction of 10 million barrels a day would come into effect in May and June, it would reduce to eight million barrels a day from July to December and further go down to six million barrels a day between January 2021 and April 2022.
The pact could not come into effect previously pending Mexico’s reluctance to agree on the cuts proposed.
However, it partially agreed to the reduction in the G20 meeting on Friday.
Mexican President Andres Manuel Lopez Obrador said his country had agreed to the pact with a reduction of 100,000 barrels a day. He said that the US also needed to cut a little more of its production.
The OPEC countries did not agree to this reduction and expressed their disapproval.
Saudi Arabia’s energy minister has urged the G20 countries and Mexico to take exceptional measures for the stability of the oil market.
Russia’s energy minister, Alexander Novak, in a statement to a state-run Russian television channel, said that he expected an additional cut of five million barrels per day by the oil-producing countries that are not a part of the OPEC+ group.
Saudi Arabia and Russia were embroiled in a price war after Moscow refused to increase its oil production reduction plan – ending in March – to 1.5 million barrels per day.
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