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Non-OPEC states agree to cut oil production by more than 600,000 barrels

10 December 2016 16:54 (UTC +04:00)

Russia and several other non-OPEC nations pledged to curb oil production next year at a meeting in Vienna, joining forces with the Organization of Petroleum Exporting Countries to end a global glut that’s crashed oil prices and shaken energy-rich economies, APA reports quoting Bloomberg.

The pact -- the first between the two sides in 15 years -- involves a reduction of about 600,000 barrels a day from non-OPEC countries, delegates familiar with the situation said, asking not to be identified before an official announcement later on Saturday.

The agreement represents the strongest effort yet by oil-rich countries, from giants such as Saudi Arabia and Russia to tiny producers including Bolivia and Equatorial Guinea, to end a market share war that has shaken investors, hit energy companies and damaged economies.

Oil prices have surged more than 15 percent since OPEC announced it will cut production for the first time in eight years, rising this week briefly above $55, more than double their January low. The price rise has propelled the share prices of energy groups from major companies such as Exxon Mobil Corp. to shale firms such as Continental Resources Inc.

"We managed to gather 25 countries from OPEC and non-OPEC with the idea of stabilizing the oil market and defending a fair price for our commodity," Venezuelan Energy Minister Eulogio del Pino said before the meeting.

The pact comes two weeks after OPEC agreed to reduce its own production by 1.2 million barrels a day. It’s unclear whether the non-OPEC curbs agreed on Saturday include natural declines from countries such as Mexico, or consist entirely of genuine production cuts.

Russia had already announced it plans to output by 300,000 barrels a day next year, down from a 30-year high last month of 11.2 million barrels a day.

In a surprise move, Kazakhstan pledged a modest output cut after coming under strong diplomatic pressure, delegates said, asking not to be identified before an official announcement. The International Energy Agency expected the Asian nation to boost production in 2017 by 160,000 barrels a day after a giant oilfield started pumping.