OPEC + countries agreed to reduce oil production by 10 million barrels per day from May 1. The corresponding action plan was approved by most states - exporters of raw materials on the basis of almost 10-hour negotiations, which started on the evening of April 9.

From May to June, the OPEC + states will jointly reduce oil production from 43.8 million to 33.8 million barrels per day. The main volumes of the reduction will be undertaken by Russia and Saudi Arabia - 2.5 million barrels per day. About this writes TASS with reference to the communiqué following the meeting.

However, the deal will enter into force only after the consent of Mexico, which during negotiations refused the conditions proposed to it - to reduce oil production by 400 thousand barrels per day. As Mexico's Minister of Energy Rocio Nale later said, the Latin American country is ready to reduce hydrocarbon production by only 100 thousand barrels per day.

It is expected that on April 10, the OPEC + ministers will continue negotiations to obtain the consent of Mexico and determine further steps to stabilize the market.

Note that the states resumed discussion in the OPEC + format after the unexpected collapse of the previous agreement in March. Then the parties to the transaction could not reach a consensus on the new conditions and from April 1 decided to completely abandon all their obligations. This provoked the largest collapse in world oil prices in recent years.

Since the beginning of March, the cost of Brent crude almost doubled and at the moment it fell below $ 22 per barrel - for the first time since March 2002. At the same time, quotes of the Russian grade Urals fell to $ 10.5 per barrel. The last time a similar value could be observed in the spring of 1999.

As the negotiators noted on April 9, the COVID-19 pandemic continues to exert significant pressure on oil prices. According to official data from the World Health Organization (WHO), the total number of people infected in the world has exceeded 1.4 million, more than 85 thousand people have died. The spread of the disease and quarantine measures provoked a massive reduction in trade, passenger traffic and fuel demand. As a result, energy consumption is also reduced.

“According to experts, about 4 billion people are on self-isolation, which, of course, influenced (economic. - RT ) activity, movement, and, accordingly, a decrease in world oil demand. We are currently seeing a very strong decline (demand. - RT ) - by 10-15 million barrels per day. This figure will be even higher, ”said Russian Energy Minister Alexander Novak during the negotiations.

Against the backdrop of rapidly falling demand, the meeting participants decided to extend the agreement until the end of April 2022. It is expected that after June to the end of 2020, the volume of reduction in oil production is planned to be reduced from 10 to 8 million barrels per day, and from January 2021 to April 2022 to 6 million.

“It is clear that countries want to buy time until demand recovers. Until the end of the first half of the year, states can cope with the acute phase of the coronavirus. Thus, in the second half of the year, demand may begin to recover, so the volume of oil production reduction will be less, ”said Denis Ikonikov, QBF portfolio manager, in an interview with RT.

Moreover, the analysts interviewed also highly appreciate the likelihood of the United States joining the deal. On April 10, Vladimir Putin, Donald Trump and the king of Saudi Arabia, Salman bin Abdel-Aziz Al Saud, had a telephone conversation during which they discussed the current situation in the oil industry and confirmed their readiness to take measures to stabilize the market. This is stated in the press service of the Kremlin.

“If a full-fledged new deal is concluded between exporters, which will include both“ traditional ”participants in the person of Russia and Saudi Arabia, and new ones, for example, in the USA, the market reaction to this format of the agreement can be emotional. Oil prices may rush to levels of $ 35-40 per barrel, ”said Anton Pokatovich, chief analyst at BCS Premier, to RT.

According to expert estimates, quotes may reach the range of $ 44-48 by the end of the year. According to analysts, a gradual recovery in oil prices could provide significant support to the Russian currency.

“Thanks to agreements to reduce oil production by more than 10 million barrels per day, the dollar exchange rate may drop below 70 rubles in the medium term and the euro exchange rate below 75 rubles,” concluded Denis Ikonnikov.