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OPEC, Russia close to slashing oil output despite U.S. pressure

Reuters  |  VIENNA 

By El Gamal, Astakhova and Nasralla

(Reuters) - OPEC and its Russia-led allies moved closer on Friday to clinching a deal that would cut production by more than the market had expected despite pressure from U.S. to reduce the price of crude.

The club will curb output by 0.8 million barrels per day from January while non-OPEC allies contribute an additional 0.4 million bpd of cuts, Iraqi Minister said after OPEC concluded two days of talks in

The OPEC deal has yet to be approved at a meeting with the non-OPEC allies later on Friday, but most ministers indicated those talks would be smooth.

prices jumped about 5 percent towards $63 a barrel by 1400 GMT as the combined cut of 1.2 million bpd would be larger than the minimum of 1 million bpd that the market had expected.

Saudi Arabia, de facto of the Organization of the Petroleum Exporting Countries, has faced demands from Trump to help the global economy by refraining from cutting supplies.

An output reduction also would provide support to by increasing the price of oil amid attempts by to squeeze the economy of OPEC's third-largest

"We will never address geopolitical issues at OPEC," told a conference.

Russian praised the ability of his Saudi counterpart "to find a solution in the most difficult situation", indicating was on board.

The OPEC deal had hung in the balance for two days - first on fears that would cut too little, and later on concerns that would receive no exemption and block the agreement.

But after hours of talks, gave OPEC the green light and indicated it was ready to cut more.

U.S. for Iran met Falih in this week, in an unprecedented development ahead of an OPEC meeting. first denied the Hook-Falih discussion took place but later confirmed it.

"U.S. political pressure is clearly a dominant factor at this OPEC meeting, limiting the scope of Saudi actions to rebalance the market," said Gary Ross, of and a veteran OPEC watcher.

The price of crude has fallen almost a third since October as Saudi Arabia, Russia and the raised output to offset lower exports from Iran, OPEC's third-largest [O/R]

The price decline prompted OPEC and Russia to start discussing an output cut, but Russia long resisted any deep reduction.

Novak met Russian in on Thursday and returned to the Austrian capital on Friday.

A source said was ready to contribute a cut of around 200,000 bpd - more than the initially suggested figure of 150,000 bpd.

Russia, and the have been vying for the position of top in recent years. The is not part of any output-limiting initiative due to its anti-trust legislation and

On Thursday, figures showed the country had become a net exporter of and refined products for the first time on record, underscoring how the surge in production has altered the supply equation in world markets.

(Additional reporting by and Alex Lawler; Writing by Dmitry Zhdannikov; Editing by Dale Hudson; Graphics by Amanda Cooper)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Fri, December 07 2018. 20:19 IST
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