Mexico cannot make additional oil output cuts, says president

Slideshow ( 3 images )

MEXICO CITY (Reuters) - Mexico is not in a position to make additional oil output cuts beyond those agreed at the April meeting of the OPEC+ group of oil-producing countries, President Andres Manuel Lopez Obrador said on Friday.

The Organization of the Petroleum Exporting Countries and its allies led by Russia, a group known as OPEC+, agreed in April to cut supply by 9.7 million barrels per day (bpd) during May and June to prop up prices, which fell sharply after the coronavirus outbreak hit. Cuts have been due to taper to 7.7 million bpd from July to December.

Under the deal, Mexico pledged to reduce output by 100,000 bpd in May and June, resisting pressure from other oil producers to make cuts of 400,000 bpd. Mexico said at the time the United States had agreed to make up most of the difference.

At a news conference, Lopez Obrador called on countries that have not yet made promised cuts to do so, and said Mexico would not make further reductions.

“We couldn’t do any more, we’ve done our part and you can check that we’re not extracting more oil, that there was a reduction of 100,000 barrels as we offered,” the president said.

“Now those ... who haven’t done it need to do it,” he added, noting that what future steps might be taken would depend on the global economy and demand for oil.

Lopez Obrador has pledged to revive the fortunes of heavily-indebted state oil company Petroleos Mexicanos and increase crude production. In the process, he has walked back parts of a reform that opened up the industry to private capital.

OPEC+ will meet on Saturday to discuss extending record oil cuts, and to push laggards such as Iraq and Nigeria to comply with existing curbs.

Mexican Energy Minister Rocio Nahle will be setting out Mexico’s position at the talks by telephone, Lopez Obrador said.

Reporting by Anthony Esposito; Editing by Dave Graham, Alistair Bell and Marguerita Choy