The Organisation of Petroleum Exporting Countries, OPEC, has finally reached a consensus to implement its first production cut since 2008.
The oil cartel will cut 1.2 million barrels per day off its output, cutting it from 33.7million to 32.5million barrels per day in an attempt to ‘stabilise the market’ and push crude prices higher.
OPEC president Mohammed Bin Saleh Al-Sada announced the deal in Vienna this afternoon, after three days of talks and tension. He called it a ‘historic move’ that would help to stabilise the market.
The deal is dependent on non-Opec members chipping in, cutting by another 600,000 barrels per day. The two sides will met in 10 days time; Russia has indicated that it’s on board.
The deal was achieved thanks to a surprise agreement between Saudi Arabia, Iraq and Iran. Saudi will take the biggest hit, lowering output by almost 500k barrels per day, while Iraq will cut by 200,000. Iran, though, will be permitted to raise its production.
