VIENNA: Organization of the Petroleum Exporting Countries (OPEC) and its Russia-led allies agreed on Friday to slash oil production by more than market expectations despite pressure from US President Donald Trump to reduce the price of crude.
The producer club will curb output by 0.8 million barrels per day from January while non-OPEC allies contribute an additional 0.4 million bpd of cuts, Iraqi Oil Minister Thamer Ghadhban said after OPEC concluded two days of talks in Vienna.
Saudi Arabia works on convincing Russia to join oil cuts
Oil prices jumped about 5% to more than $63 a barrel by 1500 GMT as the combined cut of 1.2 million bpd was larger than the minimum 1 million bpd that the market had expected. Saudi Arabia, de facto leader of the OPEC, has faced demands from Trump to help the global economy by refraining from cutting supplies.
An output reduction also would provide support to Iran by increasing the price of oil amid attempts by Washington to squeeze the economy of OPEC's third-largest producer.
OPEC waiting for Russia before deciding output cut
"We will never address geopolitical issues at OPEC," UAE Energy Minister Suhail bin Mohammed al-Mazroui told a news conference.
Russian Energy Minister Alexander Novak praised the ability of his Saudi counterpart Khalid al-Falih “to find a solution in the most difficult situation”, indicating Russia was on board.
Published in The Express Tribune, December 8th, 2018.
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