Oil-producing countries cut production of raw materials to balance the market and raise prices. On Saturday in Vienna the OPEC agreement was joined by 11 States outside the cartel. In total, over the next six months, oil production will be reduced by almost 1.8 million barrels per day.
the Historic decision was taken in Vienna, OPEC members agreed with the States outside the cartel on the reduction of the level of oil production. This is the first such agreement for the last 15 years.
to Reduce production by 558 thousand barrels per day agreed by Russia and a handful of other countries not included in OPEC. The agreement shall enter into force on 1 January next year. It was signed by 11 countries outside of the cartel. Refused only Bolivia.
“the Agreement is based on a sense of responsibility for the achievement of balancing the oil market, which will lead to positive outcomes not only for producers and exporters of oil, but also for consumers. Countries not members of OPEC who participated in today’s discussion, take responsibility for the reduction of oil production by 558 thousand barrels per day,” — said the Minister of energy and industry of Qatar Mohammed bin Saleh al-Sada.
Russia will cut production by 300 thousand barrels per day. The results of this decision, the Ministry of energy and oil companies will meet again to discuss the timetable for the reduction. Alexander Novak said that countries outside of OPEC will cut their production from October levels.
“the Total reduction in the first half of the year will be approximately 560 thousand barrels per day. This reduction in production will occur at an accelerated pace in the first half. OPEC today confirmed that in accordance with their agreement will be reduced to 1 million 200 thousand barrels per day, which will give a total reduction of nearly 1.7 — 1.8 million barrels per day,” — said the Russian Minister.
to control the decrease in oil production, OPEC creates a Committee to monitor production. It will include five countries: three of the organizations and two outside of it. Within a few days will be known when will the first meeting.
“We agreed on six months with possibility of extension for further six months. I think we will act, of course, in a situation we will monitor how the situation will develop in the markets, how will the recovery process. This will be held meetings of experts in five countries. I think that we will have the opportunity in other formats to meet the OPEC and non-OPEC both in bilateral and in multilateral formats — to assess the implementation of these agreements and to monitor the situation on the market,” said Novak.
the agreement noted by all the participants, the long-term. And not closed — it is possible to join. Moreover, the countries outside the cartel, joined the decision taken by OPEC on November 30 in Vienna. The state will reduce production to 32.5 million barrels per day. And for this reason, the most compelling: rebalancing of the market is already underway, noted the oil Minister of Saudi Arabia, but the reserves are reduced.
“the shock suffered by the oil industry a couple of years ago — this is a unique case, and we talked about this today. Less than two percent of excess supply has led to more than 70% drop in prices,” — recalled the Saudi Minister Hamid al-falih.
the Current agreement is to stabilize the markets. The next meeting of OPEC with the countries outside the cartel will take place in June.
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