Oil pro­duc­ers join forces and agree to cut pro­duc­tion again

San Francisco Chronicle Late Edition - - BUSINESS - An­thony Mills, Kiyoko Met­zler and David Ris­ing is an As­so­ci­ated Press writer.

ter­est ul­ti­mately pre­vails,” she said. “Saudi Ara­bia has a longterm goal of manag­ing the oil mar­ket to avoid the sharp falls and spikes which hurt de­mand and the abil­ity of the in­dus­try to de­velop sup­ply. On top of this, Saudi Ara­bia also needs higher oil rev­enues to fund do­mes­tic Saudi spend­ing.”

Rus­sian En­ergy Min­is­ter Alexan­der No­vak called the ne­go­ti­a­tions with the OPEC na­tions “fairly chal­leng­ing” but said the de­ci­sion “should help the mar­ket reach a bal­anced state.”

“I think this is a strong sig­nal to any­body who has doubted it that our co­op­er­a­tion is con­tin­u­ing and we can re­act to any chal­lenge the mar­ket throws at us,” he said in Rus­sian through a trans­la­tor.

OPEC’s re­liance on non-mem­bers like Rus­sia high­lights the car­tel’s wan­ing in­flu­ence in oil mar­kets, which it had dom­i­nated for decades. The OPEC-Rus­sia al­liance was made nec­es­sary in 2016 to com­pete with the United States’ vastly in­creased pro­duc­tion of oil in re­cent years. By some es­ti­mates, the U.S. this year be­came the world’s top crude pro­ducer.

The cut is un­likely to be greeted warmly by U.S. Pres­i­dent Trump, who has been pres­sur­ing the car­tel pub­licly to main­tain pro­duc­tion. On Wed­nes­day, he tweeted: “Hope­fully OPEC will be keep­ing oil flows as is, not re­stricted. The World does not want to see, or need, higher oil prices!”

One stum­bling block to an agree­ment had been Iran, Saudi Ara­bia’s re­gional ri­val and fel­low OPEC mem­ber, which had been ar­gu­ing for an ex­emp­tion to any cuts be­cause its crude ex­ports are al­ready be­ing pinched al­ready by U.S. sanc­tions.

Al-Mazrouei said that in the end Iran had been given an ex­emp­tion, as well as Venezuela and Libya.

That “means that the per­cent­age we will con­trib­ute among us is go­ing to be a bit higher,” he said.

Joe Kla­mar / AFP / Getty Im­ages

Saudi Ara­bia En­ergy Min­is­ter Khalid al-Falih (cen­ter) speaks to jour­nal­ists Thurs­day at the OPEC con­fer­ence in Vi­enna.

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