The American Petroleum Institute, the largest U.S. trade association for the oil and gas industry, has welcomed a historic OPEC+ agreement to curb global crude oil production. However, significant challenges remain in the weeks and months ahead, API has said.
As previously reported, OPEC, Russia, and allies have agreed on record production cuts to save the oil industry amid a major industry crisis exacerbated by the coronavirus pandemic.
The producers on Sunday agreed to collectively cut 9.7 million barrels of crude oil per day for two months starting 1 May 2020, thereby ending the oil price war, which started last March.
Commenting on OPEC+ decision, API President and CEO, Mike Sommers , said: “We welcome today’s announcement of an agreement by other producing nations to follow the lead of the global marketplace – and U.S. producers – to reduce supply to align with lower energy demand as result of the pandemic. This is a significant agreement that will foster increased stability in energy markets to the benefit of both American energy consumers and producers. We commend the president’s leadership and his administration’s diplomatic engagement to urge nations to bring global oil supply in line with the lower energy demand as a result of the pandemic.
“In the U.S., market conditions have led U.S. producers to reduce U.S. oil production to meet historic drops in demand. While the U.S. today leads the world in daily oil production, oil is produced, refined, used and traded across the globe, and most of the world’s oil is produced by foreign government-owned entities – some of whom announced oil production increases last month just as global energy use was decreasing due to the pandemic.
“Prior to COVID-19, the world demanded 100 million barrels of oil per day for transportation, industrial operations, manufacturing and byproducts used in every sector of the global economy – from paints and asphalts to makeup and iPhones – and projections show long-term demand for oil and natural gas around the world remains strong”.
However, Sommers concluded that significant challenges remain in the weeks and months ahead for the oil and gas sector and nearly every other.
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