OPEC+ agreed over the weekend to extend the cut in oil production until July 31. Mexico has not signed up to the new agreement. The return of 2 million barrels of crude oil to the daily supply will be postponed until that date. In addition, it was determined that Iraq and Nigeria, which have so far failed to comply with the agreed production cuts, will carry out an additional reduction in July.
OPEC has finally agreed to cut production by nearly 1.2 million bpd from January and for 6 months, representing about 4.5% of global output. Now we need to ask two questions: will the cartel countries respect the agreement? What will happen with the recent investment deficit in the sector? Will it still be profitable for the big producers to extract oil?