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After 2 days of OPEC meeting in Vienna(Austria), Saudi Arabia, Russia along with the rest of the OPEC+ coalition has decided to cut oil production of 1.2 million barrels a day from the oil market in the first quarter of 2019. The cut which accounts for more than 1 per cent of global production is regarded more than expected in order to curb the falling oil prices.
Oil prices surged as much as 6 per cent and traded above $63 a barrel in London, as soon as the news for the production broke out. Saudi Oil Minister Khalid Al-Falih, after the meeting, said: “I’m sure oil and gas producers in the U.S. are breathing a sigh of relief after the decision.”
Due to the reason that Saudi Arabia produced significantly over its OPEC commitments in November, it will its cut production by 800,000 barrels a day to 10.2 million barrels a day from January. Meanwhile, because of U.S. sanctions, Iran, Venezuela and Libya were exempted from the production cut. Some non-OPEC producers, such as Russia also announced to oil production by 400,000 bpd in order to reach target cut of 1.2 million BPD.
Russian Energy Minister Alexander Novak said: “I’m confident that our resolve, that our professionalism and our willingness to achieve results is as strong as ever. In current conditions, it’s extremely important to send a strong signal to the market.”
The next OPEC meeting is scheduled to take place in April 2019, which is earlier than usual.
