According to the press service of Kazakhstan’s Ministry of Energy, the country took this obligation as followed to the OPEC+ decision.
On April 12 members of the OPEC+ built a consensus on a collective cut in oil production. Under this decision, all OPEC members and non-members must reduce their output by 9.7 million barrels per day. This agreement is the largest in oil production history. Kazakhstan, in turn, has supported this initiative and voluntary cut daily oil output by 390,000 barrels.
The cut in oil production was forced by low oil prices and a recession in the international economy. Because of new coronavirus, many countries reduced their gasoline consumption and demand for oil.
As Kazakhstani energy officials said, the OPEC+ had no choice but to make a deal. All oil producers already filled up their storages and international output is excessive for now.
Because the OPEC+ deal is collective and the cut is made under its control, this might be seen as an incentive for the whole market. For instance, it can help to reduce overstocking and will support oil prices.
Kazakhstan has not cut its output yet but is preparing a scenario for this important action.