Malaysia said it welcomes the supply reduction agreement between OPEC members and allies, as it would stabilise the global oil market and ensure supply security for consumers amid novel coronavirus pandemic.

Malaysia welcomes OPEC+ pact to cut crude oil output. (Image for representation: Reuters)

Malaysia has agreed to cut its crude oil production by 136,000 bpd for May and June despite being a small producer and net importer of oil, its minister in charge of economic affairs said on Wednesday.

It said it welcomes the supply reduction agreement between OPEC members and allies, as it would stabilise the global oil market and ensure supply security for consumers.

“In line with the efforts undertaken by OPEC and non-OPEC countries, Malaysia reiterates our strong commitment to preserve the stability of the global oil market, despite being a small producer and net importer of oil,” minister Mustapa Mohamed told Reuters.

OPEC and allies led by Russia, a group known as OPEC+, agreed on Sunday to a record cut in output to prop up oil prices amid the coronavirus pandemic in an unprecedented deal with fellow oil nations, including the United States, that could curb global oil supply by up to 20 per cent.

Mustapa said despite the cuts, it was critical for Malaysia to preserve a favourable investment climate since its upstream sector is a liberalized market with participation of more than 20 Petroleum Arrangement Contract (PAC) operators.

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