OPEC, Russia will ease oil production cuts by next month due to reopening

We saw earlier this year that the Coronavirus pandemic that came to affect the entire population of the world did some severe damage to the economy as well. Due to the reason of virus spread, every country around the world started to impose a lockdown meaning that no one would go out to do anything. Therefore, it is obvious that the fuel consumption would go down drastically because even transportation was running at a very slow pace. Countries saw that they were buying fuel which was going unused and their reserves were also getting full.

So there was a decision made by the OPEC which is the governing body for fuel in the world as well as Russia among others to impose oil cuts for the countries from middle east so that they export less oil to the countries. Now, this also meant that the production in these countries was also reduced drastically as not enough oil was being bought and that affected the middle eastern economy as well. But it looks like things will get back to normal as far as oil production is concerned.

The reason is that Russia, as well as the OPEC, are planning to relax their oil production cuts that were put in place at the beginning of March when the lockdown was imposed. This is because countries such as Russia are beginning to lift most of their restrictions as they are seeing a decline in their COVID-19 cases, as well as a vaccine, is also going to be ready for them very soon. This means they really want to restart their economic activity and the restart of same will mean that fuel consumption will get back to normal and they will have to get back to buying oil from Middle East countries as they did before the pandemic.