BUSINESS

OPEC extends oil supply cut by 9 months

Brent rose as much as $2 toward $67 per barrel

July 01, 2019
Saudi Arabia's Energy Minister Khaled Al-Falih (R) and Saudi Deputy Oil Minister Prince Abdulaziz Bin Salman talk to the press on the sidelines of the 176th meeting of the Organization of the Petroleum Exporting Countries (OPEC) conference and the 6th meeting of the OPEC and non-OPEC countries on Monday in Vienna, Austria. — AFP
Saudi Arabia's Energy Minister Khaled Al-Falih (R) and Saudi Deputy Oil Minister Prince Abdulaziz Bin Salman talk to the press on the sidelines of the 176th meeting of the Organization of the Petroleum Exporting Countries (OPEC) conference and the 6th meeting of the OPEC and non-OPEC countries on Monday in Vienna, Austria. — AFP



VIENNA — OPEC agreed on Monday to extend oil supply cuts until March 2020, three OPEC sources said.

Benchmark Brent crude has climbed more than 25% so far this year after the White House tightened sanctions on OPEC members Venezuela and Iran, slashing their oil exports.

OPEC and its allies led by Russia have been reducing oil output since 2017 to prevent prices from sliding amid soaring production from the United States, which has overtaken Russia and Saudi Arabia as the world's top producer.

Fears about weaker global demand as a result of a US-China trade spat have added to the challenges faced by the 14-nation Organization of the Petroleum Exporting Countries.

Brent rose as much as $2 on Monday toward $67 per barrel as traders cited OPEC's resolve to curb output.

The OPEC meeting on Monday will be followed by talks with Russia and other allies, a grouping known as OPEC+, on Tuesday.

Russian President Vladimir Putin said on Saturday he had agreed with Saudi Arabia to extend existing output cuts of 1.2 million barrels per day, or 1.2% of global demand, until December 2019 or March 2020.

"I think nine months gives us enough runway to wait for the market to balance," Saudi Energy Minister Khalid Al-Falih said.

He said Saudi Arabia would continue reducing supplies to customers in July.

Iran's exports plummeted to 0.3 million barrels per day in June from as much as 2.5 million bpd in April 2018 due to Washington's fresh sanctions.

The sanctions are putting Iran under unprecedented pressure. Even in 2012, when the European Union joined US sanctions on Tehran, the country's exports stood at around 1 million bpd. Oil represents the lion's share of Iran's budget revenues. — Reuters


July 01, 2019
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