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Russia, 10 Other Non-OPEC Countries Agree to Cut Oil Output
Eleven oil-producing nations—none of them members of the Organization of Petroleum Exporting Countries—have agreed to reduce their petroleum output by a combined 558,000 barrels per day to help drive up oil prices.
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Eleven oil-producing nations—none of them members of the Organization of Petroleum Exporting Countries—have agreed to reduce their petroleum output by a combined 558,000 barrels per day to help drive up oil prices.
The group’s response was in support of OPEC’s announcement last month that in January it will trim its collective production by 1.2 million bpd (roughly 4% of its normal output), but only if non-cartel producers agreed to do the same. Oil prices have fallen from $115 per barrel in mid-2014 to less than $50 this year.
OPEC did not reveal which countries agreed to lower production or by how much. The cartel also didn’t indicate how the agreement will be policed. OPEC’s next official meeting to monitor the deal is scheduled for May 25.
Whether the agreement holds together remains to be seen. OPEC concedes its members have repeatedly ignored their own self-imposed production quotas. The organization has no system of sanctioning members who violate their allocations. Analysts note there will be strong pressure among petroleum-based economies to increase production if oil prices rise.
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