OPEC, Other Major Producers Reach Oil-Output Deal
The Organization of the Petroleum Exporting Countries (OPEC) has reached a deal with Russia and other major producers outside the cartel to reduce global oil production.
OPEC President Muhammad al-Sada said 11 non-OPEC countries agreed to cut their output by 558,000 barrels per day.
“I am happy to announce that a historic agreement has been reached,” Sada said after a meeting of oil producers at OPEC headquarters in Vienna on December 10.
The 11 non-OPEC countries taking part in the agreement are Russia, Azerbaijan, Kazakhstan, Bahrain, Brunei, Equatorial Guinea, Malaysia, Mexico, Oman, Sudan, and South Sudan.
The December 10 deal came after OPEC members on November 30 agreed to cut their own production by 1.2 million barrels a day.
The 558,000 barrels per day cut was lower than the target of 600,000 that the cartel had envisioned for non-OPEC countries.
Earlier, OPEC Secretary-General Mohammed Barkindo said he was optimistic about reaching an agreement to cut 600,000 barrels “or even more maybe.”
Much of cut will come from Russia, which has already pledged to provide half the non-OPEC cuts.
“This agreement cements and prepares us for long-term cooperation,” Saudi Energy Minister Khalid al-Falih told reporters after the meeting, calling the deal “historic.”
Russian Energy Minister Aleksandr Novak told the same news conference, “Today’s deal will speed up the oil market stabilization, reduce volatility, attract new investments.”
The agreement between OPEC and non-OPEC producers is their first deal since 2001 to reduce oil output together.
Oil prices have risen to more than $50 a barrel after OPEC agreed to cut their production last month.
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