New, extended quotas for output cuts comparing to old ones from October 2018 will come into force on January 1 under the agreements of the OPEC + countries. The deal to reduce oil output by 1.2 million bpd from October 2018 was valid until April 2020, but due to uncertainties with the demand growth, a decision was made to increase quotas to 1.7 million bps for the first quarter of 2020.

From January 1, 2020, OPEC countries will further reduce oil production by 372 thousand bpd, non-OPEC countries - by 131 thousand bpd. The total volume of additional cuts will reach 503 thousand bpd about 40% from the previously agreed cuts.

Meanwhile, the quota was unchanged for Angola (47 thousand bpd), and the share of Ecuador is no longer considered, since the country has withdrawn from OPEC. In addition, condensate was excluded from the calculation of the deal at the initiative of Russia.

The quota of Russia has not changed from before. Given the increase, Russia in the first quarter of 2020 will have to reduce oil production by 300 thousand bpd. In addition, Saudi Arabia will further reduce oil production by 400 thousand bpd so that the total reduction is 2.1 million bpd, but only if other parties to the deal fulfil their obligations.

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