Oil prices surge as OPEC agrees joint 1.2 mn bpd cut with part­ners

Sunday Times (Sri Lanka) - - INTERNATIONAL - By Joseph Sotinel and Jastin­der Khera

VI­ENNA, Dec 07 (AFP) - OPEC mem­bers and 10 other oil pro­duc­ing na­tions, in­clud­ing Rus­sia, agreed Fri­day to cut out­put by 1.2 mil­lion bar­rels a day in a bid to re­v­erse falls in prices in re­cent months.

En­ergy min­is­ters reached the deal -- which takes ef­fect from Jan­uary 1 but has al­ready sent prices surg­ing on oil mar­kets -af­ter two days of talks at OPEC head­quar­ters in Vi­enna.

“OPEC group coun­tries are con­tribut­ing 800,000 bar­rels per day as a cut, and the non-OPEC (coun­tries) will be con­tribut­ing 400,000 bar­rels per day,” Emi­rati Oil Min­is­ter Suhail Mo­hamed al-Mazrouei said at a news con­fer­ence.

Mazrouei said that three coun­tries had been al­lowed ex­emp­tions from the agree­ment due to “spe­cial cir­cum­stances”.

“Those coun­tries are Iran and Venezuela be­cause of the sanc­tions and Libya be­cause of the fact that un­for­tu­nately they are on and off,” he added, al­lud­ing to the im­pact on Libyan pro­duc­tion of con­tin­u­ing con­flict there.

Mazrouei said that the ex­emp­tions mean that the cuts in­tro­duced by other mem­ber states are “go­ing to be a bit higher than just the av­er­age for ev­ery­one”.

For his part Rus­sian En­ergy Min­is­ter Alexan­der No­vak -- whose coun­try is the world's sec­ond big­gest pro­ducer of oil -- said that the agree­ment “should help the mar­ket reach a bal­ance” and recog­nised that ne­go­ti­a­tions had been “com­plex”.

Rus­sian Min­is­ter of En­ergy of Rus­sia Alexan­der No­vak (on screen) speaks at the 175th OPEC Con­fer­ence on De­cem­ber 7, 2018 in Vi­enna, Aus­tria / AFP

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