OPEC, non-OPEC countries reach deal to cut crude output in 2019
Crude oil production will be cut by 1.2 million barrels per day from January 2019 for an initial period of six months.
The Organization of the Petroleum Exporting Countries (OPEC) and non-OPEC oil producers made the agreement in Austria’s Vienna on Friday.
According to the agreement, OPEC member states contribute 0.8 million bpd output cut and non-OPEC oil pumpers including Russia contribute 0.4 million bpd output cut from the production of October level.
But details of the quota for each member state were not given.
The deal was reached after Iran, Venezuela and Libya were granted exemption from curbing its output due to the special political situations.
The surge of U.S. oil production, which has increased by 2.5 million bpd since early 2016 to 11.7 million bpd, has given OPEC and other oil pumpers more pressure in global market competition.
The joint output cut move by OPEC and non-OPEC members came at a time when oil prices declined around 30 percent over the last two months due to oversupply in the global market.
Russia is to cut production by two percent from October’s output of 11.4 million bpd, according to Russian Energy Minister Alexander Novak.
He noted that Russia would reduce supply gradually due to its climactic and technological conditions.