The OPEC oil-producing countries and Russia have annnounced an agreement to cut crude oil production, a move that is aimed at increasing the global crude oil prices that they hope to sustain into next year.
According to the organisation, plans are underway to reduce production by 500,000 barrels per day through the first quarter of 2020. Additionally, Saudi Arabia has also pledged an additional voluntary cut of a further 400,000 barrels per day.
With the anticipated production, oild prices have already shot up. Brent jumped 82 cents to $64.21 a barrel, signifying a 1.4% increase. In the US, Brent jumped 75 cents to $59.18 a barrel.
However, non-OPEC nations such as the U.S., Canada, Brazil, Norway and Guyana will continue with oil production even if OPEC ones and Russia cut production, a move that might make them lose their market share in the long run.
The Organization of the Petroleum Exporting Countries is an intergovernmental organization of 14 nations. Its headquarters are in Vienna, Austria. As of September 2018, the 14 member countries accounted for an estimated 44% of global oil production. They also contributed 81.5% of the world’s “proven” oil reserves, giving them a major influence on global oil prices.
The current OPEC members are Algeria, Angola, Ecuador, Equatorial Guinea, Gabon, Iran, Iraq, Kuwait, Libya, Nigeria, the Republic of the Congo, Saudi Arabia, the United Arab Emirates and Venezuela.