OPEC Deal Gets Further Boost from APPO Amid Oil Crisis

• The African Petroleum Producers’ Organization (APPO) has made known its approval for the output cut agreement reached at the 9th OPEC and non-OPEC Ministerial Meeting on Thursday, 9th April 2020.
• This provides strong support to the ongoing efforts to tackle the global oil crisis that was caused by the coronavirus outbreak.
• Mexico rejected the terms of the agreement, sticking to the 10,000 barrels per day it proposed earlier, over the 400,000 barrels proposed in the agreement

The African Petroleum Producers’ Organization (APPO), the umbrella body for African oil-producing countries expressed approval for the output cut agreement reached at the 9th OPEC and non-OPEC Ministerial Meeting on Thursday, 9th April 2020.

This is a strong boost to ongoing efforts to tackle the global oil crisis that was triggered by the outbreak of Coronavirus and a price war between Saudi Arabia and Russia. APPO’s support was announced in a communiqué sent by the secretariat of the company to all stakeholders on Thursday, 9th April, 2020.

APPO member countries’ Petroleum ministers and members have decided to support the different processes pursued by all parties to resolve the challenges posed by the Coronavirus pandemic and the global oil market volatility.

READ ALSO: Russia Refuses OPEC Output-Slash Deal, Says Coronavirus might not affect Global Energy Demand

They decided to offer their support after the following considerations:

• Reviewing the global oil situation, characterized by huge volatility in the global oil market since December 2019 primarily due to the coronavirus pandemic.
• Recognizing the impact of this volatility on the economy of our respective countries.
• Recognizing the major role of OPEC in the stabilization of the international oil market.
• Consideration of the exceptional health and socio-economic impacts of this coronavirus pandemic in Africa and around the entire world; and
• Recognizing the fact that the solution to the coronavirus pandemic cannot be national but global.

In addition to the support provided to OPEC and non-OPEC member countries, APPO also praised other global oil producers for their efforts to ensure the global oil market’s long-term stability. Some parts of the statement by APPO stated:

“Furthermore, we urge the G20 countries to offer assistance to Africa as we struggle to wade off this pandemic and price stabilization process in the oil markets and encourage the most equipped laboratories and medical institutions in the world to find effective measures accepted by all (proven and consensual scientific results) to rapidly eradicate the progression of the current COVID-19 pandemic.’’

After a virtual meeting with OPEC and OPEC+, Saudi Arabia and Russia eventually agreed a 10 million barrels of oil per day cut over a two-year period as part of the step to address the ongoing global oil crisis.

Mexico, however, rejected the terms of the agreement in another twist, when it rejected the 400,000 barrels of oil per day cut it was allocated, in favour of the 100,000 barrels it had requested per day. This is another blow to the oil cut deal.