Ecuador Abandons The OPEC Deal: Who’s Next?

19 Jul 2017   Ecuador, OPEC

Ecuador announced its withdrawal from the OPEC agreement this week, a move that could shake the foundation of a deal that was already starting to show some cracks. “We need funds for the fiscal treasury and for that reason we’ve taken the decision to gradually increase production,” Ecuadorian oil minister Carlos Perez said , according to Reuters. Ecuador is running a fiscal deficit equivalent to 7.5 percent of GDP. Low oil prices are really hurting government finances, and production restrictions only add to the pain. With oil prices having posted few gains from the deal since it was implemented at the start of the year, Ecuador decided enough was enough. It needs to produce as much as possible. Ecuador, by any measure, is not a massive oil producer. The Andean nation produced just 527,000 bpd in June, making it the third smallest OPEC producer after Equatorial Guinea and Gabon. […]

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