After negotiations and consultations that have been actively conducted in recent months, the countries of OPEC still managed to overcome the existing differences in positions and agree to reduce oil production to 32 million 500 thousand barrels per day. No such agreement has been made by the cartel in the last eight years.
The total decline in oil production by OPEC member countries will be 1,200,000 barrels per day. Libya and Nigeria are exempted from the agreement due to domestic political issues. The OPEC countries have also met Iran. It is allowed to maintain production at the level achieved by Iran this year after the lifting of sanctions.
The agreement will take effect on January 1 and will last six months.
OPEC hopes that the decision will be supported by major oil producers who are not cartel members. They were offered to reduce the volume of oil production by 600 thousand barrels per day. Russia has already announced its support for the agreement reached and its readiness to reduce oil production by 300 thousand barrels per day, if the technical conditions allow it to be done.
Memorandum to reduce oil production between OPEC countries and outside the cartel to be signed on December 9th.
Market reacted to the positive outcome of negotiations OPEC by increasing oil prices by 10 percent.