OPEC, others OK cut in oil output
Oil prices rose sharply higher Friday as major oil producers, including OPEC, agreed to cut global oil production by 1.2 million barrels a day to reduce oversupply.
After two days of meetings, the Organization of the Petroleum Exporting Countries that includes Saudi Arabia and Iraq said it would cut 800,000 barrels per day for six months from January, though some nations such as Iran, which is facing wide-ranging sanctions from the U.S., have been given an exemption.
The balance will come from Russia and other non-OPEC countries. The United States, one of the world’s biggest producers, is not part of the deal.
“This is a major step forward,” said United Arab Emirates’ Energy Minister Suhail Mohamed al-Mazrouei, who chairs the regular meetings in Vienna in his capacity as President of the OPEC Conference.
Oil producers have been under pressure to reduce production after a sharp fall in oil prices in the past couple of months. The price of oil has fallen about 25 percent because major producers are pumping oil at high rates.
After the announcement, Brent crude, the international standard, was up $2.79 a barrel, or 4.7 percent, at $62.85.