After two days of high drama, low farce and long periods of tedium, the OPEC+ group of countries, led by Saudi Arabia and Russia, almost agreed to cut their oil production by an initial 10 million barrels a day in response to the coronavirus-triggered collapse in demand. That “almost” is important.
The drama was provided by Mexico refusing to accept its allotted cut. The farce followed when the country’s oil minister left the virtual OPEC+ meeting to hold separate talks with her U.S. and Canadian counterparts, while the other energy ministers agonized for hours over how to respond. The tedium? Well, that was just the bits in between.
Mexico was asked to cut 400,000 barrels a day of production in the first phase of an OPEC+ deal that would run for an unprecedented two years. It offered one-quarter of that, and from a slightly higher baseline than what was asked for.
