The Organization of the Petroleum Exporting Countries and non-OPEC countries signed an agreement to cut oil production for the first time since 2001. Prior to the deal, the parties have been negotiating for almost a year.
The cartel agreed to reduce output by 1.2 million barrels a day on November 30 with an aim to boost oil prices and to restore the balance on the global market. The agreement will come into effect on January 1, 2017.
OPEC had thought that non-OPEC nations would cut production by 600,000 barrels a day. Russia pledged to cut 300,000 barrels a day during the first half of 2017.
However, the oil-producing countries, which are not members of the cartel, said they will remove 558,000 barrels of crude from the market. Russia reiterated its intention to cut output by 300,000 barrels a day, but said this would happen gradually.
According to Russian Energy Minister Alexander Novak, Russia’s oil production would decline to 10.947 million barrels a day over the next six months.
