Why OPEC+ Oil Production Cut Agreed Under Covid-19 Stress Is Destined To Fall Apart

Why OPEC+ Oil Production Cut Agreed Under Covid-19 Stress Is Destined To Fall Apart

The bonhomie had lasted, at least on paper, since 2016 and was largely instrumental in bringing the oil market out of the 2015-16 downturn.. When the Saudis saw the coronavirus or Covid-19 outbreak batter China, the world's largest importer of crude oil with an average appetite of 14 million barrels per day (bpd), the Russians resisted.. In the two weeks that followed, Russian commentators claimed their country could survive prices even as low as $8 per barrel, and the Saudis hired their own mammoth convoy of supertankers to flood the crude market.. MORE FROM FORBES How To Interpret Saudi Wealth Fund's $2 Billion Splurge On Big Oil Stocks. Converting the Easter Holiday weekend into a working one, a deal was cobbled together to take 9.7 million bpd of production off the market from the May 1 to July 1.. The bulk of the output cuts were predicated on Russia and Saudi Arabia cutting 2.5 million bpd from agreed - and somewhat inflated - levels of over 11 million bpd.. The cut was approved, albeit a tad too late for April which saw negative oil prices for the first time in trading history, and