SHAFAQNA- OPEC concluded its 175th meeting with an accord to remove 1.2 million barrels a day of crude from the market, with non-OPEC allies including Russia taking a 400,000 barrel-a-day share. Iran will be exempted from such a cut due to sanctions.
Oil-producing countries agreed to cut production by 1.2 million barrels per day from January 2019 for six months to rebalance oil markets and support oil prices. At a crucial meeting on Friday in Vienna, Opec and non-Opec members like Russia resisted pressure from US president Donald Trump to reduce production to prop up oil prices. Trump insisted on lower oil prices and more output from Opec, according to Gulfnews.
Iran is exempt from the output cut deal, Iran Oil Minister Bijan Namdar Zanganeh told reporters following the meeting.
The deal was reached after Iran was granted an exemption from curbing its output due to US sanctions, which have already sharply reduced the nation’s oil shipments, Financial Tribune told.
Oil prices jumped more than 5% on Friday as big Middle East producers in OPEC agreed to reduce output to drain global fuel inventories and support the market.
Exemptions were given to Iran, Venezuela and Libya as their production is hit by sanctions, economic turmoil and conflict respectively. The deal is fox six months with review in April 2019. “We among Opec are committed on 800,000 and deliver on it,” said Opec President Suhail Al Mazroui.
“Saudi Arabia is committed to market stability. Our guiding principle is balancing demand and supply. We are not in the business of cutting but also in releasing supplies when required,” said Saudi Energy Minister Khalid Al Flalih.
Zanganeh said earlier that as a founder member of the Organization of the Petroleum Exporting Countries, Iran will carry on its activities within the half-a-century old group. Speaking on the sidelines of the 175th OPEC conference in Vienna on Friday, Zanganeh told reporters “As long as the US unilateral sanctions on our country do not end, we will not join any agreements to cut crude production even by a single barrel,” ILNA reported.
Analysts reacted positively to the decision and said the agreement to cut production by 1.2 million barrels per day (mbd) is a major accomplishment, particularly by the Saudi authorities, the UAE and Russia.
“Such an agreement would stabilise the oil market. Brent crude oil prices could rise again to the range of $65 to 70 per barrel, as we expected at the International Institute of Finance,” Garbis Iradian, Chief Economist for Mena at Institute of International Finance in Washington told Gulf News by email.
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