Opec deal to cut global oil production ‘dependent on Mexico’

Opec has said a proposed deal to cut global oil production “is conditional on the consent of Mexico”.

The statement on Friday following a marathon video-conference, which ended in the early hours without a decision, confirmed figures reported by Saudi Arabia.

The proposal calls for a cut in production of 10 million barrels per day until July, then an eight million barrels per day cut until the end of the year.

Starting in 2021, a reduction of six million barrels per day will last for 16 months.

The move is aimed at limiting a crash in prices that has pushed energy companies toward bankruptcy during the coronavirus pandemic.

Both Saudi Arabia and Kuwait earlier blamed Mexico for endangering the proposal. Mexico has not directly acknowledged that.

US President Donald Trump earlier said he had spoken with Russian President Vladimir Putin and King Salman of Saudi Arabia about the negotiations.

“They’re getting close to a deal, that’s Opec and many other countries outside of Opec, and we’ll see what happens,” he said at a White House news briefing.

“There’s so much production nobody even knows what to do with it, that’s how it’s working,” he added.

Reports of a deal were welcomed by the American Petroleum Institute, which counts most US oil and gas producers among its members.

“While this move will help stabilise world oil markets, significant challenges remain throughout the supply chain since current market disruptions are driven largely by this historic drop in demand as a result of the Covid-19 pandemic,” said API president Mike Sommers, president of API.

But by early Friday, Kuwait Oil Minister Khaled al-Fadhel suggested the deal was not yet done.

“At the meeting for the Opec group that ended at 3am, Mexico disrupted the agreement of all the countries to reduce the production of oil by 10 million barrels a day,” he wrote, without elaborating.

There was no immediate response from Mexico, though its energy minister, Rocio Nahle, posted on Twitter around the same time that his country proposed cutting its output by 100,000 barrels a day for the next two months.

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