In an historic effort to power the oil and gas industry out of its worst tailspin in its 100-year history, the United States, Canada and other G20 nations are backing the OPEC+ group of countries in a broad effort to reduce global oil supply and restore stability to the oil and gas markets.
In a shocking turn, however, Mexico has refused to commit to its share of cuts agreed by OPEC+ on Thursday. According to the production cuts agreed by OPEC members, Russia and other members of the Declaration of Cooperation, Mexico has been asked to cut 400,000 barrels per day from May to June.
Mexico, though, has refused, as President Andrés Manuel López Obrador is pushing the national oil company, Pemex, to revive the country’s economy and energy sector.
The overall agreement is now in jeopardy, with Saudi Arabia saying the OPEC+ deal, which cuts a total of 10 million barrels of oil per day from the market, is contingent on Mexico’s participation. Mexico has agreed to cut just 100,000 barrels of oil per day. There are reports that President Donald Trump has agreed for the United States to potentially shoulder the rest of Mexico’s needed cuts. Negotiations with Mexico are set to continue on Saturday.
An agreement, reached Friday during a virtual meeting of the G20 energy ministers, will see G20 members coordinate efforts to stem the hemorrhaging of the oil and gas sector, as well as create a task force to monitor actions moving forward. A statement released by the G20, however, does not include a specific amount G20 members will cut from daily production. Previously, OPEC+ had said they would push G20 members to cut an additional 5 million barrels of oil per day.
