Opec Agreement Timeline

Later, on 3 April, the Saudi foreign and energy ministers issued statements criticizing Putin and accusing Russia of not participating in the OPEC agreement. [38] On March 8, 2020, Saudi Arabia launched a price war with Russia, which facilitated a quarterly drop of 65% in the price of oil. [1] In the first weeks of March, U.S. oil prices fell by 34%, crude oil by 26% and Brent oil by 24%. [2] [3] The price war was triggered by a breakdown in the dialogue between the Organization of the Petroleum Exporting Countries (OPEC) and Russia over planned oil production cuts in the midst of the COVID 19 pandemic. [1] Russia left the agreement, which led to the downfall of the OPEC alliance. Oil prices had already fallen by 30% since the beginning of the year due to a drop in demand. [4] The fight for awards is one of the main causes and impact of the global stock market crash that followed. [5] The agreement is historic because, for the first time, OPEC and its alliances are not the only ones to shrink. They also urged G20 countries to cut production to ensure that everyone plays a role in stabilizing crude oil prices. So what was agreed? Here is the breakdown of the cuts and timelines; President Donald Trump, who was heavily involved in mediating a deal between Saudi Arabia and Russia after a price war broke down between the two countries, applauded the deal, tweeting that it was a “great deal for all.” As a result of the COVID 19 pandemic, plant production and transportation declined, which also led to a decline in aggregate oil demand and oil prices. [14] February 15, 2020, the International Energy Agency forecast that demand growth would fall to its lowest level since 2011, with growth of 325,000 barrels per day over the full year, to 825,000 barrels per day and a decline in consumption of 435,000 barrels per day in the first quarter.

[15] Although global oil demand has declined, a drop in demand in Chinese markets, the largest since 2008, triggered an OPEC summit on March 5, 2020 in Vienna. At the summit, OPEC agreed to further reduce oil production by 1.5 million barrels per day by the second quarter of the year (an overall production cut of 3.6 million bpd from the original 2016 agreement), and the group is expected to review that policy on June 9 at its next meeting. [16] OPEC has asked Russia and other non-OPEC members to comply with OPEC`s decision. [13] On 6 March 2020, Russia rejected the request, marking the end of the unofficial partnership, as oil prices fell by 10% after the announcement. [17] [18] The United States` dependence on oil has long influenced its foreign policy. This chronology traces the history of the evolution of oil in the United States and the geopolitical and environmental issues that follow in more than forty stages. Among the three main periods is the rise of oil as a raw material, starting in 1850; the era of geopolitical competition after the Second World War; and the current era of deregulation and diversification.