OPEC, 11 Non-Cartel Oil Producers Impose 6-Month Production Cuts Since January 1

The Organization of the Petroleum Exporting Countries (OPEC) member states and 11 major non-cartel oil producing countries including Russia and Mexico will begin limiting oil production since January 1, 2017 in line with the Vienna agreement reached to normalize oil prices.

MOSCOW (Sputnik) — The cartel members will abide on a voluntary basis by the production ceiling of 32.5 million barrels per day, which was preliminary agreed in Algiers in September and later confirmed on November 30 in Vienna.

OPEC efforts to stabilize the oil market are also backed by 11 non-cartel states — Azerbaijan, Bahrain, Brunei, Equatorial Guinea, Kazakhstan, Malaysia, Mexico, Oman, Russia, Sudan, and South Sudan – who have agreed to collectively curb oil production by 558,000 barrels per day.

While Russia would cut its production by 300,000 barrels a day, Mexico, Azerbaijan and Kazakhstan would reduce oil output by 100,000, 35,000 and 20,000 barrels per day respectively.

The oil production curtailment deal will be effective for six months and later may be rolled over for another six months depending on the state of the oil market.

Compliance with the agreement will be monitored by a special committee, co-chaired by Kuwait and Russia, with its first meeting scheduled to take place in late January in the Austrian capital.

The measure, which was under discussion for over a year before implemented, is expected not only to help dispose of the whopping world oil glut of 300 million barrels, but also to bring oil prices to the level of $55-60 per barrel in 2017, compared with 2016 average of $34 dollars per barrel.