Mexico Walks Out of OPEC+ Talks

After more than ten hours of ongoing negotiations late on Thursday, Mexico became the only country that did not accept the production cut agreed by the Organization of the Petroleum Exporting Countries (OPEC) to reduce global oil output by 10MMb/d.

With this agreement, Mexico was expected to reduce its production by 400Mb/d. Earlier this morning, OPEC had tentatively agreed to cut production by about 10MMb/d by May and June, delegates report.

Following Mexico's decision, Amena Bakr, a former Reuters energy correspondent, considered that Mexico's refusal to cut production is a bad decision for the country. "So the group should consider dividing Mexico's 400,000 barrels among other members," he wrote on his Twitter account.

Bakr said that Rocío Nahle, Mexico's Minister of Energy withdrew from the virtual meeting, while other members decided to continue negotiations. “This won’t go down well in history Mexico.... bad move,” she pointed out.

This won’t go down well in history Mexico.... bad move.

— Amena Bakr (@Amena__Bakr) April 9, 2020

According to Bloomberg, Mexico's unexpected pullback does not change the urgent need for the Organization of the Petroleum Exporting Countries and its allies to cut output.

By May and June, the production of Saudi Arabia and Russia should be 8.5MMb/d. according to the draft agreement. In total, the countries of the OPEC + alliance will limit their production to 10MMb/d, from 43.8MMb/d to 33.8 MMb/d. For each country participating in the cut, production should decrease by 23 percent, according to TASS.