The OPEC+ cartel has agreed to cut oil production by a further 1 million barrels per day (BPD) for early next year, with Saudi Arabia also announcing voluntary cuts of a similar amount, in a move that would likely drive up the oil prices across the world.

The announcement was made on Thursday (Nov 30) following a relentless push from Saudi to make additional production cuts since July. The kingdom wanted its OPEC+ allies to reduce oil production on the back of crude prices falling by more than 10 per cent from their September high.

The move follows a meeting in June where OPEC+ agreed on a complex deal that revised production targets for several members.

<h2>Individual members revise targets</h2>

Final details of the accord, including national production levels, will be announced individually by each country rather than in the customary OPEC+ communique, Bloomberg reported citing delegates of the group.

Russia, on the other hand, has voluntarily agreed to a supply cut of 500,000 bpd through the end of the first quarter, according to a statement by Deputy Prime Minister Alexander Novak.

A source in the Saudi Energy Ministry told the Saudi Press Agency that the kingdom will extend its voluntary production cut through the end of the first quarter of 2024.

While Algeria agreed to cut January oil production by another 50,000 bpd.

The are 14 countries that are members of the OPEC+ cartel, with Brazil declaring it to be the 15th member on Thursday.

These 14 countries represent around 40 per cent of world oil production.

<h2>Oil cuts to drive up prices</h2>

Also read |&nbsp;<a href="https://www.wionews.com/world/brazil-confirms-joining-opec-from-next-year-minister-says-all-set-664820">Brazil confirms joining OPEC+ from next year, minister says 'all set'</a>

The announcement comes at a time when the prices of oil were down to a near $98 a barrel in September due to the sluggish global economy and growing supplies outside the cartel’s quota system.

Also read |&nbsp;<a href="https://www.wionews.com/world/henry-kissinger-the-most-controversial-and-influential-american-of-20th-century-dies-at-100-664470">Henry Kissinger, America's most controversial and equally influential diplomat, dies at 100</a>

It has been further predicted that the price could fall even further next year, when forecasters including the International Energy Agency anticipate a sharp slowdown in demand growth.

Meanwhile, the move boosted Brent crude above $84 a barrel, up about 1.3 per cent on the day and up 6 per cent since Friday to its highest level in three weeks.

(With inputs from agencies)

The OPEC+ cartel has agreed to cut oil production by a further 1 million barrels per day (BPD) for early next year, with Saudi Arabia also announcing voluntary cuts of a similar amount, in a move that would likely drive up the oil prices across the world.

The OPEC+ cartel has agreed to cut oil production by a further 1 million barrels per day (BPD) for early next year, with Saudi Arabia also announcing voluntary cuts of a similar amount, in a move that would likely drive up the oil prices across the world. The announcement was made on Thursday (Nov 30) following a relentless push from Saudi to make additional production cuts since July. The kingdom wanted its OPEC+ allies to reduce oil production on the back of crude prices falling by more than 10 per cent from their September high. The move follows a meeting in June where OPEC+ agreed on a complex deal that revised production targets for several members. Individual members revise targets Final details of the accord, including national production levels, will be announced individually by each country rather than in the customary OPEC+ communique, Bloomberg reported citing delegates of the group. Russia, on the other hand, has voluntarily agreed to a supply cut of 500,000 bpd through the end of the first quarter, according to a statement by Deputy Prime Minister Alexander Novak. A source in the Saudi Energy Ministry told the Saudi Press Agency that the kingdom will extend its voluntary production cut through the end of the first quarter of 2024. While Algeria agreed to cut January oil production by another 50,000 bpd. The are 14 countries that are members of the OPEC+ cartel, with Brazil declaring it to be the 15th member on Thursday. These 14 countries represent around 40 per cent of world oil production. Oil cuts to drive up prices Also read | Brazil confirms joining OPEC+ from next year, minister says 'all set' The announcement comes at a time when the prices of oil were down to a near $98 a barrel in September due to the sluggish global economy and growing supplies outside the cartel’s quota system. Also read | Henry Kissinger, America's most controversial and equally influential diplomat, dies at 100 It has been further predicted that the price could fall even further next year, when forecasters including the International Energy Agency anticipate a sharp slowdown in demand growth. Meanwhile, the move boosted Brent crude above $84 a barrel, up about 1.3 per cent on the day and up 6 per cent since Friday to its highest level in three weeks. (With inputs from agencies)

OPEC+ announces significant oil production cuts

The Kremlin said on Wednesday (September 6) that Russian President Vladmir Putin had a phone conversation with Saudi Crown Prince Mohammed bin Salman. It also said that leaders agreed recent agreement to cut energy supplies had stabilised the global energy markets.

Saudi Arabia and Russia are global leaders in oil production. The countries announced on Tuesday that voluntary oil supply cuts will be extended till the end of the year.

Russia will roll over its decision to reduce oil exports by 300,000 barrels per day (bpd), while Saudi Arabia will extend its voluntary oil output cut of 1 million bpd.

Watch | Kremlin: Nothing to say on report about Putin-Kim Jong-Un meet

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Kremlin said Putin and Mohammed bin Salman both, were highly satisfied with cooperation between the countries within OPEC+ framework. OPEC+ is the group of leading oil producers.

"It was noted that the agreements reached on reducing oil production, combined with voluntary commitments to limit the supply of the commodity, make it possible to ensure the stability of the global energy market," the Kremlin said in a readout of the call.

In October last year, OPEC+ decided to reduce output by two million barrels per day. The decision had enraged the US who at the time had accused Saudi Arabia of siding with Russia amid the Ukraine war.

Oil prices spiked in July, the first month of Saudi-only cut taking effect. The prices cleared USD 80 per barrel threshold which analysts often describe as price Saudi Arabia needs to balance it budget.

Also Read | <a href="https://www.wionews.com/world/zelensky-claims-russian-strike-kills-at-least-16-in-east-ukraine-market-632988">Zelensky claims Russian strike kills at least 16 in east Ukraine market</a>

Daily oil production in Saudi Arabia is approximately nine million barrels, well below its reported capacity of 12 million bpd.

Saudi oil firm Aramco announced profits of USD 30.08 billion in August for the second quarter of 2023. There was a fall of 38 per cent &nbsp;in the profits from the same period last year. The prices had surged last year after Russia invaded Ukraine.

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The Kremlin said on Wednesday (September 6) that Russian President Vladmir Putin had a phone conversation with Saudi Crown Prince Mohammed bin Salman. It also said that leaders agreed recent agreement to cut energy supplies had stabilised the global energy markets.

The Kremlin said on Wednesday (September 6) that Russian President Vladmir Putin had a phone conversation with Saudi Crown Prince Mohammed bin Salman. It also said that leaders agreed recent agreement to cut energy supplies had stabilised the global energy markets. Saudi Arabia and Russia are global leaders in oil production. The countries announced on Tuesday that voluntary oil supply cuts will be extended till the end of the year. Russia will roll over its decision to reduce oil exports by 300,000 barrels per day (bpd), while Saudi Arabia will extend its voluntary oil output cut of 1 million bpd. Watch | Kremlin: Nothing to say on report about Putin-Kim Jong-Un meet × Kremlin said Putin and Mohammed bin Salman both, were highly satisfied with cooperation between the countries within OPEC+ framework. OPEC+ is the group of leading oil producers. "It was noted that the agreements reached on reducing oil production, combined with voluntary commitments to limit the supply of the commodity, make it possible to ensure the stability of the global energy market," the Kremlin said in a readout of the call. In October last year, OPEC+ decided to reduce output by two million barrels per day. The decision had enraged the US who at the time had accused Saudi Arabia of siding with Russia amid the Ukraine war. Oil prices spiked in July, the first month of Saudi-only cut taking effect. The prices cleared USD 80 per barrel threshold which analysts often describe as price Saudi Arabia needs to balance it budget. Also Read | Zelensky claims Russian strike kills at least 16 in east Ukraine market Daily oil production in Saudi Arabia is approximately nine million barrels, well below its reported capacity of 12 million bpd. Saudi oil firm Aramco announced profits of USD 30.08 billion in August for the second quarter of 2023. There was a fall of 38 per cent in the profits from the same period last year. The prices had surged last year after Russia invaded Ukraine. You can now write for wionews.com and be a part of the community. Share your stories and opinions with us here. WATCH WION LIVE HERE ×

Putin, Mohammed bin Salman talk over phone, are satisfied about oil supply cuts: Kremlin

Saudi Arabia's efforts to diversify its economy beyond oil face a setback as business expansion in the nation experienced a notable deceleration in July. The impact of elevated interest rates began to affect Saudi Arabia's non-oil sectors, contributing to an overall slowdown in business growth last month.

According to Riyad Bank, the Purchasing Managers' Index for Saudi Arabia declined from 59.6 in June to 57.7 in July. While the reading remains comfortably above 50, indicating growth rather than contraction, the deceleration can be attributed to a moderation in new-order growth.

Amidst intense competition, price reductions were observed during the month, yet business activity expansion remained on par with June's levels.

However, in 2022, the Saudi economy demonstrated robust growth, expanding by over 9 percent, outpacing other G20 members, and propelling the GDP beyond the trillion-dollar mark for the first time. Although this year's growth trajectory has fallen short of expectations due to declining oil prices and production, some experts now even anticipate a contraction.

Saudi Arabia's currency, the riyal, is fixed to the U.S. dollar, necessitating close monitoring of decisions made by the U.S. Federal Reserve. This linkage persists even as Saudi inflation has remained notably lower than that of the United States over the past two years. The Fed has raised interest rates aggressively over the past year, most recently by 25 basis points last month, to lower inflation.

Furthermore, in a bid to bolster crude prices, Saudi Arabia announced on Thursday its decision to extend oil production cuts for at least an additional month, until the end of September. Anticipated Saudi production for September hovers around 9 million barrels per day (bpd).

Crown Prince Mohammed Bin Salman has directed substantial investments into diverse sectors such as tourism, sports, and electric vehicles. Nonetheless, the country's exports remain heavily reliant on oil, which accounts for more than 90 percent of its total exports.

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Saudi Arabia's efforts to diversify its economy beyond oil face a setback as business expansion in the nation experienced a notable deceleration in July. The impact of elevated interest rates began to affect Saudi Arabia's non-oil sectors, contributing to an overall slowdown in business growth last month.

Saudi Arabia's efforts to diversify its economy beyond oil face a setback as business expansion in the nation experienced a notable deceleration in July. The impact of elevated interest rates began to affect Saudi Arabia's non-oil sectors, contributing to an overall slowdown in business growth last month. According to Riyad Bank, the Purchasing Managers' Index for Saudi Arabia declined from 59.6 in June to 57.7 in July. While the reading remains comfortably above 50, indicating growth rather than contraction, the deceleration can be attributed to a moderation in new-order growth. Amidst intense competition, price reductions were observed during the month, yet business activity expansion remained on par with June's levels. However, in 2022, the Saudi economy demonstrated robust growth, expanding by over 9 percent, outpacing other G20 members, and propelling the GDP beyond the trillion-dollar mark for the first time. Although this year's growth trajectory has fallen short of expectations due to declining oil prices and production, some experts now even anticipate a contraction. Saudi Arabia's currency, the riyal, is fixed to the U.S. dollar, necessitating close monitoring of decisions made by the U.S. Federal Reserve. This linkage persists even as Saudi inflation has remained notably lower than that of the United States over the past two years. The Fed has raised interest rates aggressively over the past year, most recently by 25 basis points last month, to lower inflation. Furthermore, in a bid to bolster crude prices, Saudi Arabia announced on Thursday its decision to extend oil production cuts for at least an additional month, until the end of September. Anticipated Saudi production for September hovers around 9 million barrels per day (bpd). Crown Prince Mohammed Bin Salman has directed substantial investments into diverse sectors such as tourism, sports, and electric vehicles. Nonetheless, the country's exports remain heavily reliant on oil, which accounts for more than 90 percent of its total exports. WATCH WION LIVE HERE

Saudi Arabia's non-oil businesses face troubles as growth slows in July

The Biden administration is reportedly planning to delay military aid to Saudi Arabia to punish the Gulf country for leading OPEC’s decision to cut oil production going against the request.

According to NBC, which has quoted two US officials, the administration might delay shipments of advanced Patriot MIM-104E guided ballistic missiles, among other arms and ammunition to Saudi Arabia.

Saudi has Patriot launch systems and needs missiles to defend against the Houthi rebels in Yemen. It had inked a deal with the US to purchase 300 missiles from it.

While some military officials have supported the retributive move, there are others who want to keep the oil production cuts a separate issue, said NBC report citing sources.

Apart from that, the other methods that might be employed by the US to punish the Saudi regime include excluding them from any upcoming military exercises and engagements like regional meetings or conferences, the officials said.

Though nothing has been decided yet, the Biden administration might drop the idea if the Saudis increase the production in the upcoming December OPEC meeting, the officials added.

The ties between the US and Saudi soured after the Gulf nation, apart from Russia, influenced the OPEC group to cut oil production by two million barrels a day, contrary to the requests by Joe Biden.

The move incensed the White House which has been struggling to control inflation and reduce gas prices, which have&nbsp;been at new highs since the Russia-Ukraine war broke out in February this year.

Earlier this month, Biden while speaking to CNN said, "There's going to be some consequences for what they've done with Russia."

(With inputs from agencies)

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The Biden administration is reportedly planning to delay military aid to Saudi Arabia to punish the Gulf country for leading OPEC’s decision to cut oil production going against the request.

The Biden administration is reportedly planning to delay military aid to Saudi Arabia to punish the Gulf country for leading OPEC’s decision to cut oil production going against the request. According to NBC, which has quoted two US officials, the administration might delay shipments of advanced Patriot MIM-104E guided ballistic missiles, among other arms and ammunition to Saudi Arabia. Saudi has Patriot launch systems and needs missiles to defend against the Houthi rebels in Yemen. It had inked a deal with the US to purchase 300 missiles from it. While some military officials have supported the retributive move, there are others who want to keep the oil production cuts a separate issue, said NBC report citing sources. Apart from that, the other methods that might be employed by the US to punish the Saudi regime include excluding them from any upcoming military exercises and engagements like regional meetings or conferences, the officials said. Though nothing has been decided yet, the Biden administration might drop the idea if the Saudis increase the production in the upcoming December OPEC meeting, the officials added. The ties between the US and Saudi soured after the Gulf nation, apart from Russia, influenced the OPEC group to cut oil production by two million barrels a day, contrary to the requests by Joe Biden. The move incensed the White House which has been struggling to control inflation and reduce gas prices, which have been at new highs since the Russia-Ukraine war broke out in February this year. Earlier this month, Biden while speaking to CNN said, "There's going to be some consequences for what they've done with Russia." (With inputs from agencies) WATCH WION LIVE HERE:

Biden looking to ‘punish’ Saudi for oil output cut decision by delaying military supplies: Report

OPEC leader Saudi Arabia and non-OPEC Russia have agreed a preliminary deal to extend existing record oil output cuts by one month while raising pressure on countries with poor compliance to deepen their cuts, OPEC+ sources told Reuters.

OPEC+ agreed to cut output by a record 9.7 million barrels per day, or about 10% of global output, in May and June to lift prices battered by plunging demand linked to lockdown measures aimed at stopping the spread of the coronavirus.

Rather than easing output cuts in July, OPEC and its allies, a group known as OPEC+, were discussing keeping those cuts beyond June.&nbsp;

Also read:&nbsp;<a href="wionews.com/world/in-the-wake-of-the-historic-opec-deal-the-country-with-the-worlds-largest-oil-reserves-struggles-to-survive-292405" hreflang="en">In the wake of the historic OPEC deal, the country with the World’s largest oil reserves struggles to survive</a>

"Saudi Arabia and Russia are aligned on the extension for one month," one OPEC source said.

"Any agreement on extending the cuts is conditional on countries who have not fully complied in May deepening their cuts in upcoming months to offset their overproduction," the source said.

The group also considered holding an online meeting on June 4 to discuss output policy, after Algeria, which holds the presidency of the Organization of the Petroleum Exporting Countries, proposed bringing forward a meeting planned for June 9-10.

The OPEC source said that an earlier meeting on June 4 is also conditional on compliance and that the discussions now are about implementing criteria for those countries who have not fully complied with the oil cuts and how they can compensate for their overproduction in the coming months.

OPEC members Iraq and Nigeria has shown weak compliance with its output reduction targets in May.&nbsp;

Also read:&nbsp;<a href="wionews.com/world/opec-meeting-delayed-as-saudi-arabia-and-russia-row-over-price-collapse-290596" hreflang="en">OPEC+ meeting delayed as Saudi Arabia and Russia row over price collapse</a>

Kazakhstan also failed to fully meet its obligations under the OPEC+ oil cut pact, sources said.

Two sources also told Reuters that Gulf OPEC producers Saudi Arabia, Kuwait and the United Arab Emirates are not discussing extending their deeper voluntary oil cuts of 1.180 million bpd beyond June.

Oil prices rose in recent days from the lows of April buoyed by a continuing recovery in China, the epicentre of the coronavirus outbreak, while other economies are slowly opening up after lockdowns to contain its spread.&nbsp;

"Overall the market is moving in the right direction with the gradual easing of the lockdown. But we still need to be cautious. There is always a risk of another wave of the coronavirus," the first OPEC source said.

"The other thing is how quickly will demand patterns recover. Inventories are still above average levels and that needs to be tackled.

OPEC leader Saudi Arabia and non-OPEC Russia have agreed a preliminary deal to extend existing record oil output cuts by one month while raising pressure on countries with poor compliance to deepen their cuts, OPEC+ sources told Reuters.

OPEC leader Saudi Arabia and non-OPEC Russia have agreed a preliminary deal to extend existing record oil output cuts by one month while raising pressure on countries with poor compliance to deepen their cuts, OPEC+ sources told Reuters. OPEC+ agreed to cut output by a record 9.7 million barrels per day, or about 10% of global output, in May and June to lift prices battered by plunging demand linked to lockdown measures aimed at stopping the spread of the coronavirus. Rather than easing output cuts in July, OPEC and its allies, a group known as OPEC+, were discussing keeping those cuts beyond June. Also read: In the wake of the historic OPEC deal, the country with the World’s largest oil reserves struggles to survive "Saudi Arabia and Russia are aligned on the extension for one month," one OPEC source said. "Any agreement on extending the cuts is conditional on countries who have not fully complied in May deepening their cuts in upcoming months to offset their overproduction," the source said. The group also considered holding an online meeting on June 4 to discuss output policy, after Algeria, which holds the presidency of the Organization of the Petroleum Exporting Countries, proposed bringing forward a meeting planned for June 9-10. The OPEC source said that an earlier meeting on June 4 is also conditional on compliance and that the discussions now are about implementing criteria for those countries who have not fully complied with the oil cuts and how they can compensate for their overproduction in the coming months. OPEC members Iraq and Nigeria has shown weak compliance with its output reduction targets in May. Also read: OPEC+ meeting delayed as Saudi Arabia and Russia row over price collapse Kazakhstan also failed to fully meet its obligations under the OPEC+ oil cut pact, sources said. Two sources also told Reuters that Gulf OPEC producers Saudi Arabia, Kuwait and the United Arab Emirates are not discussing extending their deeper voluntary oil cuts of 1.180 million bpd beyond June. Oil prices rose in recent days from the lows of April buoyed by a continuing recovery in China, the epicentre of the coronavirus outbreak, while other economies are slowly opening up after lockdowns to contain its spread. "Overall the market is moving in the right direction with the gradual easing of the lockdown. But we still need to be cautious. There is always a risk of another wave of the coronavirus," the first OPEC source said. "The other thing is how quickly will demand patterns recover. Inventories are still above average levels and that needs to be tackled.

Saudi, Russia reach deal on oil cuts, raising pressure for compliance

OPEC will meet with 10 partner countries, including Russia, on Friday to try to thrash out an agreement on oil production cuts, a day after the group's members failed to reach a deal.

The oil cartel had been expected to sign off on cuts to stem a plunge in oil prices at a meeting on Thursday, but it broke up without an accord.

"No, I am not confident" about the chances of a deal, Saudi oil minister Khalid Al-Falih told reporters after a long day of <a href="http://www.wionews.com/business-economy/opec-oil-cuts-at-risk-as-russia-yet-to-commit-181925">negotiations at OPEC</a>'s headquarters in Vienna.

However, OPEC and its non-cartel members -- who account for around half of global output -- agree on one thing: a glut on the market has led to oil prices falling by more than 30 per cent in the space of two months.

However, the major players among the oil giants all have their own reasons to look to others to act.

For Russia, which leads the non-member countries in the so-called OPEC+ alliance, "it's much more difficult to cut than for other countries, because of our climatic conditions," Russian Energy Minister Alexander Novak said on Thursday in Saint Petersburg.

Saudi Arabia, meanwhile, has to bear in mind pressure from the US, after President <a href="http://www.wionews.com/world/opec-meets-as-trump-calls-for-oil-taps-to-be-kept-on-181837">Donald Trump</a> demanded in a tweet on Wednesday that OPEC not boost prices.

In addition, the kingdom's diplomatic position has been weakened by the furore over the killing of journalist Jamal Khashoggi.

Though al-Falih insisted that "we don't need permission from anyone to cut" production, the figure of a million barrels put forward by Saudi Arabia was lower than the reduction expected by the markets.

Market jitters

Iran, Saudi Arabia's geopolitical rival and OPEC's third-largest producer, suggested it was in favour of deeper cuts -- while asking to be exempted from them because of the effects of US sanctions targeting its oil sector.

The thorny question of exemptions, which will also be sought by Venezuela and Libya according to the Bloomberg news agency, could be crucial for Friday's talks.

The amount and the timetable of any cuts imposed by Russia will also be a key sticking point.

Iraqi oil minister Thamir Abbas Al Ghadhban said he was still "hopeful" an agreement could be reached during talks on Friday.

However, markets displayed doubts with fresh falls in oil prices sparking a sell-off of stocks by investors.

The price of a barrel of Brent, the European benchmark, sank below the symbolic $60 mark because the reduction of around one million barrels floated by Saudi Arabia was below what markets had been expecting.

Analysts say that the details of any agreement will be key in determining what happens next to prices.

"If it's one million (barrels) excluding Iran, then it's in fact 1.2, 1.3, which should be supportive of price," Abhishek Deshpande, an oil analyst at JP Morgan, told AFP.

This would be because the markets would price in the drop in Iran's production expected due to sanctions.

"But if (the agreement) is including Iran, that's not enough," Deshpande added.

In June, OPEC and its partners agreed to allow for a boost in production by Saudi Arabia and Russia to compensate for the expected losses in production from Iran after the US dramatically withdrew from the Iran nuclear deal in May and vowed to re-impose sanctions.

However, the US then granted temporary waivers to eight allies to allow them to carry on importing Iranian oil, contributing to a plunge in oil prices which wiped out the gains seen since early 2017.

OPEC will meet with 10 partner countries, including Russia, on Friday to try to thrash out an agreement on oil production cuts, a day after the group's members failed to reach a deal.

OPEC will meet with 10 partner countries, including Russia, on Friday to try to thrash out an agreement on oil production cuts, a day after the group's members failed to reach a deal. The oil cartel had been expected to sign off on cuts to stem a plunge in oil prices at a meeting on Thursday, but it broke up without an accord. "No, I am not confident" about the chances of a deal, Saudi oil minister Khalid Al-Falih told reporters after a long day of negotiations at OPEC's headquarters in Vienna. However, OPEC and its non-cartel members -- who account for around half of global output -- agree on one thing: a glut on the market has led to oil prices falling by more than 30 per cent in the space of two months. However, the major players among the oil giants all have their own reasons to look to others to act. For Russia, which leads the non-member countries in the so-called OPEC+ alliance, "it's much more difficult to cut than for other countries, because of our climatic conditions," Russian Energy Minister Alexander Novak said on Thursday in Saint Petersburg. Saudi Arabia, meanwhile, has to bear in mind pressure from the US, after President Donald Trump demanded in a tweet on Wednesday that OPEC not boost prices. In addition, the kingdom's diplomatic position has been weakened by the furore over the killing of journalist Jamal Khashoggi. Though al-Falih insisted that "we don't need permission from anyone to cut" production, the figure of a million barrels put forward by Saudi Arabia was lower than the reduction expected by the markets. Market jitters Iran, Saudi Arabia's geopolitical rival and OPEC's third-largest producer, suggested it was in favour of deeper cuts -- while asking to be exempted from them because of the effects of US sanctions targeting its oil sector. The thorny question of exemptions, which will also be sought by Venezuela and Libya according to the Bloomberg news agency, could be crucial for Friday's talks. The amount and the timetable of any cuts imposed by Russia will also be a key sticking point. Iraqi oil minister Thamir Abbas Al Ghadhban said he was still "hopeful" an agreement could be reached during talks on Friday. However, markets displayed doubts with fresh falls in oil prices sparking a sell-off of stocks by investors. The price of a barrel of Brent, the European benchmark, sank below the symbolic $60 mark because the reduction of around one million barrels floated by Saudi Arabia was below what markets had been expecting. Analysts say that the details of any agreement will be key in determining what happens next to prices. "If it's one million (barrels) excluding Iran, then it's in fact 1.2, 1.3, which should be supportive of price," Abhishek Deshpande, an oil analyst at JP Morgan, told AFP. This would be because the markets would price in the drop in Iran's production expected due to sanctions. "But if (the agreement) is including Iran, that's not enough," Deshpande added. In June, OPEC and its partners agreed to allow for a boost in production by Saudi Arabia and Russia to compensate for the expected losses in production from Iran after the US dramatically withdrew from the Iran nuclear deal in May and vowed to re-impose sanctions. However, the US then granted temporary waivers to eight allies to allow them to carry on importing Iranian oil, contributing to a plunge in oil prices which wiped out the gains seen since early 2017.

OPEC and partners face steep challenge to reach oil cut deal

Eleven countries agreed on Saturday to cut their oil output, teaming up with the OPEC cartel in an exceptional bid to end the world`s glut of crude and reverse a dramatic fall in income.

Russia and 10 other non-OPEC states will reduce their production by more than half a million barrels per day (bpd), OPEC announced.

The deal will take effect from the start of 2017 and last for six months, though it may be extended depending on market conditions.

&quot;I am happy to announce that a historic agreement has been reached,&quot; said Qatar`s Energy Minister Mohammed Bin Saleh Al-Sada, whose country holds the rotating presidency of the Organization of the Petroleum Exporting Countries (OPEC).

The cut will contribute to OPEC`s own initiative to ease a saturated market and end a price slump that has brutally affected the economies of many oil producers.

On November 30 its members announced a slash in output by 1.2 million barrels per day (bpd) beginning in January, to 32.5 million bpd.

Under that deal, OPEC called on non-member producer states to lower their output by 600,000 bpd. Saturday`s deal approves cuts totalling 558,000 bpd.&nbsp;

Russia had already signalled it would provide half of that production cut in the first half of 2017.

Among the other countries that will contribute cuts Kazakhstan agreed to reduce production by 20,000 bpd, Mexico 100,000 bpd,

Oman 40,000 bpd and Azerbaijan 35,000 bpd, according to Bloomberg.

The deal also includes Malaysia, Bahrain, Equatorial Guinea, Sudan, South Sudan and Brunei.

&quot;This is a truly historic event, the first time that so many oil-producing countries are meeting in one room, to accomplish what we`ve done,&quot; Russian Energy Minister Alexander Novak told a press conference.

&quot;In the room we had more than half of the global oil&quot; production, he said.

In a statement following the meeting, OPEC said the other oil giants were working &quot;to achieve oil market stability in the interest of all oil producers and consumers&quot;.

A monitoring committee, comprising three OPEC and two non-OPEC members, will now be set up.

Sada said OPEC would continue its efforts to persuade non-OPEC producers to join the reduction effort.

And in another signal to the markets, the cartel`s leading producer Saudi Arabia announced that it would go &quot;substantially&quot; beyond its commitment of production cuts made last week.In a speech to the conference earlier, Novak stressed the plunge in oil prices had led to &quot;severe consequences&quot;.

&quot;What the past two months have shown is that there is a growing consensus among producers that the market recovery process has taken far too long... It has had a major impact on all our countries, in terms of economic growth, heavy losses in revenue and deep social spending cuts.&quot;

As for the impact on consumers, he said: &quot;We only have to look at the damaging levels of deflation in some OECD countries, as well as the record low interest rates, sometimes in negative territory in real terms, which is partly attributed to lower oil prices.&quot;

Oil prices had climbed Friday as hopes grew of a deal. In late European business, West Texas Intermediate (WTI) crude stood at $51.44, 60 cents up on the day, while Brent rose 20 cents to $54.09.

The November agreement ended weeks of uncertainty and volatility on crude markets, pushing prices above $50 for the first time in a month.

It also represented a dramatic reversal from OPEC`s Saudi-led game plan, introduced in 2014, of flooding the market to force out rivals, in particular US shale oil producers.

The strategy saw production outstrip demand, causing prices to plunge from more than $100 a barrel in June 2014 to near 13-year lows below $30 earlier this year.

OPEC produces around 40 percent of the world`s crude so needed non-OPEC members to join the cuts to drain current stockpiles. 
But Bloomberg calculations, based on OPEC data, indicated there would be little overall reduction in record oil inventories in 2017 -- even if OPEC could convince non-members to come on board.

(AFP)

Russia and 10 other non-OPEC states will reduce their production by more than half a million barrels per day, OPEC said

Eleven countries agreed on Saturday to cut their oil output, teaming up with the OPEC cartel in an exceptional bid to end the world`s glut of crude and reverse a dramatic fall in income. Russia and 10 other non-OPEC states will reduce their production by more than half a million barrels per day (bpd), OPEC announced. The deal will take effect from the start of 2017 and last for six months, though it may be extended depending on market conditions. "I am happy to announce that a historic agreement has been reached," said Qatar`s Energy Minister Mohammed Bin Saleh Al-Sada, whose country holds the rotating presidency of the Organization of the Petroleum Exporting Countries (OPEC). The cut will contribute to OPEC`s own initiative to ease a saturated market and end a price slump that has brutally affected the economies of many oil producers. On November 30 its members announced a slash in output by 1.2 million barrels per day (bpd) beginning in January, to 32.5 million bpd. Under that deal, OPEC called on non-member producer states to lower their output by 600,000 bpd. Saturday`s deal approves cuts totalling 558,000 bpd. Russia had already signalled it would provide half of that production cut in the first half of 2017. Among the other countries that will contribute cuts Kazakhstan agreed to reduce production by 20,000 bpd, Mexico 100,000 bpd, Oman 40,000 bpd and Azerbaijan 35,000 bpd, according to Bloomberg. The deal also includes Malaysia, Bahrain, Equatorial Guinea, Sudan, South Sudan and Brunei. "This is a truly historic event, the first time that so many oil-producing countries are meeting in one room, to accomplish what we`ve done," Russian Energy Minister Alexander Novak told a press conference. "In the room we had more than half of the global oil" production, he said. In a statement following the meeting, OPEC said the other oil giants were working "to achieve oil market stability in the interest of all oil producers and consumers". A monitoring committee, comprising three OPEC and two non-OPEC members, will now be set up. Sada said OPEC would continue its efforts to persuade non-OPEC producers to join the reduction effort. And in another signal to the markets, the cartel`s leading producer Saudi Arabia announced that it would go "substantially" beyond its commitment of production cuts made last week.In a speech to the conference earlier, Novak stressed the plunge in oil prices had led to "severe consequences". "What the past two months have shown is that there is a growing consensus among producers that the market recovery process has taken far too long... It has had a major impact on all our countries, in terms of economic growth, heavy losses in revenue and deep social spending cuts." As for the impact on consumers, he said: "We only have to look at the damaging levels of deflation in some OECD countries, as well as the record low interest rates, sometimes in negative territory in real terms, which is partly attributed to lower oil prices." Oil prices had climbed Friday as hopes grew of a deal. In late European business, West Texas Intermediate (WTI) crude stood at $51.44, 60 cents up on the day, while Brent rose 20 cents to $54.09. The November agreement ended weeks of uncertainty and volatility on crude markets, pushing prices above $50 for the first time in a month. It also represented a dramatic reversal from OPEC`s Saudi-led game plan, introduced in 2014, of flooding the market to force out rivals, in particular US shale oil producers. The strategy saw production outstrip demand, causing prices to plunge from more than $100 a barrel in June 2014 to near 13-year lows below $30 earlier this year. OPEC produces around 40 percent of the world`s crude so needed non-OPEC members to join the cuts to drain current stockpiles. But Bloomberg calculations, based on OPEC data, indicated there would be little overall reduction in record oil inventories in 2017 -- even if OPEC could convince non-members to come on board. (AFP)

Non-OPEC oil states agree to cuts in 'historic' deal

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