Global cuts to oil production ... How much and who will reduce? How will this happen?

Global oil producers, led by OPEC, are expected to reduce production by about 20 million barrels per day, or approximately 20% of global daily supplies, which will be through a mixture of pledges and productivity cuts due to weak economic activity and purchases to oil reserves.

Who reduces oil production?
The Organization of the Petroleum Exporting Countries, led by Saudi Arabia, along with allies, including Russia, have cut production by about 9.7 million barrels per day. This group is known as OPEC Plus.

Other big oil producers join OPEC Plus, who will make cuts, many of whom seldom control production at the local level.

A number of these countries, including the United States and Canada, say that their cuts are economic in nature, as producers from the private sector reduce production against the backdrop of price drops by 50% in 2020.

Others have also announced cuts, including Brazil, whose state-owned company Petrobras is cutting production by 200,000 bpd.

When did OPEC Plus start reducing production?
The OPEC includes Saudi Arabia, Iraq, the United Arab Emirates and other countries, and makes up about a third of the world's oil supplies. Besides Russia, Kazakhstan, and other countries, he became known as OPEC Plus.

In late 2016, the group agreed to cut production to prevent prices from falling sharply as US shale oil production rose to record levels, which eventually raised the United States to become the world's largest producer.

The agreement was for a reduction of 1.7 million barrels per day, which was then the deepest reduction implemented by the group. Since then, the group has renewed that cut and implemented additional price hikes.

What happened in March?
Saudi Arabia and Russia, the two largest producers in the OPEC Plus group, could not agree to cut production as the Corona virus pandemic worsened.

In return, the agreement canceled and Saudi Arabia raised production to about 12 million barrels per day, which led to increased exports and lower prices. This pushed Brent crude prices to drop to around $ 23 a barrel.

Other ways to cut stocks
A number of major oil-consuming countries say they will start buying oil for their strategic reserves, which helps to withdraw some supplies from the market.

What are the forecasts for supplies around the world?
Most analysts believe that without production cuts, oil prices will further plummet and inventories be filled within weeks. With this agreement, that is still possible, but at a slower pace.