The OPEC+ oil-production agreement – all’s well that ends well

The OPEC+ oil-production agreement – all’s well that ends well

The members of OPEC+, an alliance of the 13 OPEC countries and 10 cohorts led by Russia, on Thursday announced they had reached a compromise in their discussions about changes to oil production levels in the coming months.Saudi Arabia and Russia are said to have favored extending the current reduction of 7.7 million barrels per day (bpd) into the first few months of 2021. Several other countries reportedly opposed an extension and wanted to reduce the cuts to 5.8 million bpd, as agreed in April.In the end, the 23 countries agreed to taper the cuts by 500,000 bpd in January and then decide the future trajectory on a monthly basis. Countries that overproduced in previous months were given until the end of March to make compensatory cuts, which equates to an extension of three months.The discussions were reportedly tense and the OPEC+ ministerial meeting had to be delayed from Tuesday until Thursday to line up all the “ducks in a row.”As recently as the beginning of November, an agreement to extend the current level of production cuts for a few months had looked more feasible. Then came the hope for early approvals of coronavirus (COVID-19) vaccines, rising stock markets and