11 non-OPEC nations, including Russia, agree to cut oil production

Eleven oil producing nations who are not part of the Organisation of the Petroleum Exporting Countries (OPEC) have agreed to cut oil production as part of an effort to boost prices and ease an oversaturated market.

The group of countries, including Russia, Azerbaijan, Bahrain, Malaysia, and Mexico will cut output by 558,000 barrels per day for six months starting from January.

The pledge, made at a meeting of Opec and non-Opec ministers on 10 December, comes after OPEC announced on November 30 that it has agreed to curb oil production by 1.2 million barrels per day.

Ministers from OPEC met with a number of ministers from non-OPEC oil producing countries at the OPEC Secretariat in Vienna and agreed on the necessity to jointly cooperate “to achieve oil market stability in the interest of all oil producers and consumers,” according to an OPEC press release

Oil prices have more than halved since 2014 because of a global supply glut. Cutting production should help stabilise the market and drive prices back up.

“Today’s agreement will accelerate the stabilisation in the markets,” said Russia’s energy minister Alexander Novak.

The deal was called “historic” by Saudi Energy Minister Khalid al-Falih who said that Saudi Arabia was prepared to cut ouput more if necessary.

Khalid al-Falih was quoted by Bloomberg as saying: “I can tell you with absolute certainty that effective January 1 we’re going to cut and cut substantially to be below the level that we have committed to on November 30,”

Jason Bordoff at the Center on Global Energy Policy at Columbia University told The Financial Times:

“Securing non-Opec’s full participation in the Opec agreement reached in Vienna is a victory for Opec and especially Saudi Arabia, which has long insisted the burden of cuts needed to be shared.”