OPEC agrees to extra 1.5 million bpd supply cut in light of coronavirus

Iran’s oil minister Bijan Zanganeh has today confirmed that OPEC ministers have agreed an extra 1.5 million barrel per day (bpd) cut in oil production, according to a Reuters report.

Ministers of the 14-member oil cartel met in Vienna to discuss the prospect of further supply cuts in light of the ongoing effect of the coronavirus on oil prices, which have sunk by 20% since the beginning of the outbreak earlier this year.

In a press release published later in the day, OPEC said: “[The] COVID-19 outbreak has had a major adverse impact on global economic and oil demand forecasts in 2020, particularly for the first and second quarters.”

Consequently, the cartel agreed to the additional 1.5 million bpd cut in order to shore up prices. However, the decision is yet to receive the backing of key non-OPEC states, including Russia.

OPEC will meet with Russia and other non-OPEC partners including Bahrain and Brazil on Friday to negotiate the final points of a potential deal.

More than 95,000 people have been diagnosed with COVID-19, the vast majority in China where the virus originated late last year in Hubei province. More than 50 million people remain in lockdown in the province, following attempts to quell the spread of the virus.