OPEC+ countries reach new agreement to cut oil production

Oil prices dropped on Friday as traders feared that an Opec deal to slash global supplies by 10% would not offset a historic drop in demand due to the coronavirus outbreak.

The price of Brent crude fell nearly 2.5% to $31.82 per barrel on Friday, despite news that the oil cartel and allies – known as Opec+ – had reached a deal that would end a price war between Saudi Arabia and Russia that threatened to flood the market with more oil than the world could use.

On April 10, the G20 energy ministers held talks on reducing oil production, attended by 23 countries. They agreed on a new OPEC + deal until 2022. It assumes a gradual reduction in the volume of oil production cuts, Report says, citing RIA Novosti.

Russian Energy Minister Alexander Novak said on Friday that the group of global oil producers known as OPEC+ might take additional measures on oil markets if necessary.

"These measures to reduce OPEC + production by 10 million barrels per day in total in the next two months-may and June. Then, in the second half of 2020, the reduction in production by the Alliance should reach 8 million, " he said.

The Russian Energy Minister added that the deal would be valid for two years. Moreover, for 2021, the parameters laid down in the agreement are a reduction of 6 million barrels for all participating 23 countries.

Novak noted that the meeting of the energy G20 was held in the format of a videoconference. Both OPEC and non-OPEC countries participated in the talks. They conferred for almost 10 hours.