OPEC agreed to reduce its oil output
Almaty. September 29. Silkroadnews – OPEC countries have agreed to reduce their crude production for the first time in eight years, Russian media reported.
«OPEC made an exceptional decision today (...) After two and a half years, the cartel reached consensus to manage the market», mass media quoted Iranian Oil Minister Bijan Zanganeh saying.
«We have decided to decrease the production around 700 thousand barrels per day», he said.
According to B. Zanganeh and other oil ministers of OPEC states, the Organization of the Petroleum Exporting Countries would reduce output to a range of 32.5-33.0 million bpd. OPEC estimates its current output at 33.24 million bpd.
He also added, the cartel will create the coordination committee that in November will present a final proposal on crude output reduction.
Iran, as the minister said, will not freeze the production, yet its output volume will «depend on the decision of the OPEC formal meeting to be held in November».
It is noted that Algeria proposed OPEC member states to reduce the total volume of oil production by 796 thousand bpd. According to the document published by Bloomberg, Saudi Arabia has been offered to reduce production by 442 thousand bpd compared to August, to 10.1 million bpd. For Iran, the recommended quota is 3.7 million bpd, meaning 52 thousand bpd increase in oil production compared to the August level. The document also says that Nigeria and Libya are exempted from the output reduction.
The OPEC states also plan to call non-OPEC countries to join the agreements on the crude output reduction.
The OPEC meeting participants also suggested to freeze the level of oil production for a period from 6 to 12 months.
To remind, within the framework of the International Energy Forum in Algeria on September 28 the oil-exporting countries planned to hold talks on the output volumes freezing. The discussion has been initiated by Venezuela, Ecuador and Kuwait.
The next meeting of OPEC will be held in Vienna on November 30.
