A historic production cut agreement between OPEC and its allies, known as OPEC+, has not quite got over the line as Mexico refused to agree to its share of the cuts after a marathon meeting between the oil-producing nations that lasted more than nine hours.
The other members of OPEC+, led by Saudi Arabia and Russia, earlier in the day agreed to cuts that would take 10m barrels per day offline as the coronavirus pandemic sees demand for crude slide.
Mexico’s Secretary of Energy Rocío Nahle said in a tweet that the country would be willing to cut production by 100,000 barrels per day for the next two months. OPEC+ had reportedly asked for a cut of 400,000 barrels per day, according to Reuters.
OPEC said in a statement that the initial 10m barrels per day cut would last through June, before tapering to 8m barrels per day for the rest of the year. From January next year, the cuts would decrease to 6m barrels per day, which would continue through April 2022.
To put the 10m cut in perspective, OPEC slashed production by 2.2m barrels during the 2008 global financial crisis.
However, a 10m cut is unlikely to see significant oil price rises, analysts suggest, given than global oil demand is forecast to drop by 25m barrels per in April alone.