With an aim to give major boost to global oil markets, member countries of the Organisation of the Petroleum Exporting Countries (OPEC) and its allies on Friday reached a deal to cut crude oil production by 1.2 million barrels per day.
The agreement was given green signal following two days of grueling negotiations and despite opposition from US President Donald Trump. The agreement will be implemented in January next year.
According to the agreement, the alliance will take 1.2 million barrels per day off the market for the first six months of 2019. The 15-member OPEC group agreed to cut crude oil output by 800,000 barrels per day, while Russia and its allied producers would slash oil production by around 400,000 barrels per day.
Before the meeting, Saudi Arabia, the de facto leader of the OPEC, had said that the group would seriously consider the views of PM Modi and United States President Donald Trump on lowering global crude oil prices.
Earlier on Wednesday, in a tweet, US President Trump said, “Hopefully OPEC will be keeping oil flows as is, not restricted. The World does not want to see, or need, higher oil prices!”
Notably, the crucial meet came at a time when the global oil market is unstable in the aftermath of the economic sanctions imposed on Iran by the Trump administration.
Crude rates skyrocketed to a four-year high of USD 86 per barrel in October. But since then, the price spiralled down to about USD 60 per barrel.
Importantly, the OPEC comprises 15 oil-producing nations and comprises Algeria, Angola, Ecuador, Equatorial Guinea, Gabon, Iran, Iraq, Kuwait, Libya, Nigeria, Congo, Saudi Arabia, United Arab Emirates, Venezuela, and Qatar. These countries account for more than half of the world`s oil output. However, Qatar will pull out from the group in January 2019, as it wants to focus on its efforts to increase its natural gas production.