OPEC and its closest partners have made a dramatic move to try and stabilise the crude oil price by agreeing to adjust downwards their overall crude oil production by 9.7 mb/d.
The new cuts will commenced from May 1, 2020 for an initial period of two months that concludes on June 30, 2020.
For the subsequent period of six months, from July 1, 2020 to December 31, 2020, the total adjustment agreed will be 7.7 mb/d.
It will be followed by a 5.8 mb/d adjustment for a period of 16 months, from January 1, 2021 to April 30, 2022.
OPEC said the baseline for the calculation of the adjustments is the oil production of October 2018, except for the Kingdom of Saudi Arabia and The Russian Federation, both with the same baseline level of 11.0 mb/d.
The agreement will be valid until April 30, 2022, however, OPEC said the extension of this agreement will be reviewed during December 2021.
OPEC has also called upon all major producers to provide commensurate and timely contributions to the efforts aimed at stabilising the oil market.
OPEC will next meet on June 10,2020 via videoconference, to determine further actions, as needed to balance the market.