OPEC and non-OPEC members initially agree on terms of oil cut deal

According to media reports, OPEC finalized the discussions regarding an oil output reduction in the meeting held in Vienna on November 30, by coming to an agreement to hold production at 32.5 million barrels a day. Non-OPEC members, too, will reportedly cut their production by 600,000 barrels/day under the deal.

Saudi Arabia reportedly agreed to reduce its oil production by 486,000 b/d from its October levels. Among OPEC and non-OPEC members, Saudi Arabia committed to make the largest cut in production.

Iraq, despite its insistence on being exempt from an OPEC deal due to the ongoing wars in the country, agreed to cut production by 209,000 barrel/day from its October levels, the Oil Minister said.

Russia, as a non-OPEC member, agreed to reduce its oil production by 300,000 barrels/day as of January 1, but it is not yet known from which level the cut will be made.

However, Iran will reportedly be allowed to produce 3.797 million barrels/day. This indicates an increase from its October levels, which was 3.69 million barrels/day, but is still below the pre-sanctions level of 4 million barrels/day.

Indonesia reportedly suspended its OPEC membership since it cannot agree to cut its production due to budget constraints. Its share from the cut will be distributed among 13 OPEC member countries.

Libya and Nigeria are exempt from the deal due to the domestic conflicts that have been going on in these countries over this year.

The deal will be valid as of January 1 for six months.

OPEC’s next official meeting will be held on May 25.