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OPEC, Russia agree to extend oil production cuts to 2018-end

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OPEC, Russia agree to extend oil production cuts to 2018-end

The Organization of the Petroleum Exporting Countries, or OPEC, and its allies, including Russia, agreed Nov. 30 to extend oil production cuts by nine months through the end of 2018, Reuters reported the same day.

Saudi Energy Minister Khalid al-Falih told reporters in Vienna that members and non-members of OPEC approved the extension of cuts after the current deal expires March 2018. Under the current deal, producers are slashing output by about 1.8 million barrels per day to boost oil prices, Reuters said.

OPEC also agreed to cap the combined output of Nigeria and Libya at 2017 levels below 2.8 million barrels per day, Reuters reported. The two OPEC members have been exempt from cuts due to unrest and lower-than-normal output, Reuters said.

Falih added that it would be premature to discuss an exit strategy and that OPEC would review progress at its next regular meeting in June 2018.

Russia, a key non-OPEC producer, had been seeking clarity on how to exit the cuts. The country needs much lower oil prices to balance its budget than OPEC leader Saudi Arabia, Reuters said.

OPEC and Russia produce more than 40% of global oil, the publication noted.