OPEC, Other Oil Producers Agree To Extend Production Cuts Through 2018

Russian Energy Minister Aleksandr Novak speaks during an informal OPEC meeting in Vienna on November 29.

OPEC, Russia, and other noncartel members have agreed to extend oil output cuts until the end of 2018 as they continue efforts to end a global glut and raise market prices, officials say.

The Iranian and Iraqi oil ministers confirmed to reporters on November 30 that the Organization of the Petroleum Exporting Countries and partner nations agreed to the nine-month extension.

The current agreement to cut supplies by some 1.8 million barrels a day -- about 2 percent of world production -- was to expire in March 2018.

Several oil ministers, including those from Iran, Iraq, and Angola, left open the possibility that the deal could be reevaluated in June in the event that oil markets become too tight because of the reductions.

Brent crude prices edged up above $63 a barrel on November 30 as ministers appeared close to the extension.

Oil prices peaked at over $100 a barrel in mid-2014, before sinking below $30 in early 2016.

Russia has expressed concerns that should oil prices remain above $60 throughout 2018, crude production and fracking operations could ramp up in the United States, which is not part of the agreement, and cause another price collapse.

Russia, Kazakhstan, Azerbaijan, and several other producers outside of OPEC joined Saudi Arabia, Iran, Iraq, and other cartel members in late 2016 in the agreement to cut production in an effort to boost prices.

The cuts, put in place in early 2017, have helped lift global prices to above $60, although they have on occasion fallen back to near $50 a barrel.

Based on reporting by Reuters, dpa, Bloomberg, Dow Jones, and TASS