OPEC+ deal threatened as Mexico walks out, refusing to participate in cuts
- 10 April 2020
An agreement between Saudi Arabia and Russia for record oil-production cuts was endangered late on Thursday as Mexico refused to participate in the curbs and left the meeting without approving the deal, APA-Economics reports citing Bloomberg.
Ministers will continue to discuss ways to secure the Latin American country’s approval on Friday, delegates said. The situation, which came after more than 9 hours of talks via video link, cast doubt over a global effort to revive the oil market from a debilitating coronavirus-induced slump.
Earlier on Thursday, OPEC+ had tentatively agreed to cut production by about 10 million barrels a day in May and June, delegates said. Saudi Arabia and Russia, the biggest producers in the group, would each take output down to about 8.5 million a day, with all members agreeing to cut supply by 23%, one delegate said.
Attention should have turned on Friday to the Group of 20 energy ministers meeting. A contribution from major producers including the U.S. and Canada -- possibly as much as 5 million barrels a day of further supply reductions -- could boost efforts to revive prices after the initial OPEC+ agreement failed to push crude higher on Thursday.
The dogged refusal of Mexico’s Energy Secretary Rocio Nahle Garcia to accept the production level proposed for her country as part of the deal upended that schedule.