Effects of Covid-19 forced US, Russia, and OPEC members to cut 10% of their oil production

Countries efforts to control the Covid-19 pandemic made people to stay in their homes and stopped them from using their vehicles and consuming fuels. This huge decrease of fuel demand led to a noticeable price reduction which made the costs to be more than prices.

In order to increase the prices world’s biggest oil producers such as Russia, Saudi Arabia and United States decided to change their production plans and decrease the world’s oil supply by 10%.

The OPEC+ group members agreed to reduce their production by 9.7 million barrels per day (bpd) on May and June. By the beginning of July, the reduce rate will be change to 7.7 million bpd which will be continued for six months (to the end of December 2020).

From January 1, 2021 until 30 April 2021 the reduction rate will be 5.8 million bpd. The decided production reduction rate is more than four times deeper than the biggest previous oil cut which was happened in 2008.