Khobar – On Saturday, ministers of OPEC were discussing the cut of oil production to 600,000 barrel for Non-OPEC countries. The meeting ended with less than expected.
President of Organization of the Petroleum Exporting Countries (OPEC) Qatar’s Energy Minister Mohammed bin Saleh al-Sada said that non-OPEC countries agree to cut oil production by 558,000 barrels per day.
If this number is less than the target, it doesn’t negate that OPEC has finally managed to convince non-OPECs to join the Vienna agreement.
Following the meeting, Saudi Energy Minister Khalid al-Falih tweeted on his official account that this deal is “historic” and “this agreement cements and prepares us for long-term cooperation.”
Falih told reporters that the deal “is meant to accelerate the natural process of rebalancing” the oil market.
On Saturday, producers from outside the 13-country group agreed to reduce output by 558,000 bpd, short of the initial target of 600,000 bpd but still the largest contribution by non-OPEC ever.
The 13 non-OPEC countries taking part in the agreement are: Russia, Azerbaijan, Bahrain, Brunei, Equatorial Guinea, Kazakhstan, Malaysia, Mexico, Oman, Russia, Sudan, South Sudan, Brazil, and Bolivia.
Brazil and Bolivia refused to curb their production, while some countries like Russia and Oman suggested to do so voluntarily to aid OPEC in recovering.
This is the first agreement reached by OPEC and non-OPEC since 2001.
Russia pledged to cut output by 300,000 barrels a day next year, down from a 30-year high last month of 11.2 million barrels a day. Mexico agreed to cut 100,000 barrels, Azerbaijan by 35,000 barrels and Oman by 40,000 barrels.
An OPEC source told Bloomberg that Russia and Oman will join Kuwait, Venezuela and Algeria in the Monitoring Committee, which is expected to closely monitor the implementation of and compliance with this agreement and report to the conference.
OPEC was hoping Kazakhstan would reduce its production to 50,000 barrels, but according to country’s Energy Minister Kanat Bozumbayev, it can reduce oil production by 20,000 barrels from the November level.
Kanat said said freezing oil output at November levels may make sense.