“OPEC made an exceptional decision today … After two and a half years, OPEC reached consensus to manage the market,” Iranian Oil Minister Bijan Zanganeh was quoted by Iran’s SHANA news agency as saying, without giving details.
How much each country will produce is to be decided at the next formal meeting of OPEC in November, when an invitation to join cuts could also be extended to non-OPEC countries. Oil prices rose more than 5 per cent to trade above $48 per barrel few minutes after the news broke out. Shares of Exxon Mobil, the largest publicly listed oil company in the world rose by 4.2 percent, the biggest one-day increase since February this year.
“The agreement also signals a new phase in relations between Saudi Arabia and Iran, which have clashed on oil policy since 2014 and are backing opposite sides in civil wars in Syria and Yemen. The deal indicates that Riyadh and Tehran, with the mediation of Russia, Algeria and Qatar, were able to overcome the differences that sunk another proposal to cap production earlier this year.” Read a market report from Bloomberg.
However according to the head of Vitol Group BV, the world’s largest oil-trading house, Mr Ian Taylor, crude oil market could remain oversupply curve until 2018 unless the producing nations put a break in flooding the market.
(Various Sources)
