OPEC Deal to Curb Output to Facilitate Sustainable Oil Price Development

OPEC oil production levels decrease will contribute to the long term sustainable development of the market prices, the senior communication adviser of the Norwegian Ministry of Petroleum and Energy told Sputnik.

MOSCOW (Sputnik) — The agreement to decrease oil production levels reached by OPEC member states on Wednesday will contribute to the long term sustainable development of the market prices, the senior communication adviser of the Norwegian Ministry of Petroleum and Energy told Sputnik.

"The OPEC countries have acted to re-establish the balance in the oil marked and contribute to a long term, sustainable oil price development. A stable oil market, with prices on a reasonable high level is important for both oil producing and oil consuming countries," Ella Bye Mørland said.

On Wednesday, OPEC, the main consortium of the oil-exporting and oil-producing countries, agreed at a meeting in Algiers to lower production to a range of 32.5 to 33 million barrels of oil per day from 33.4 million in a bid to re-balance the world oil market amid oversupply that caused prices to plunge to as low as $26 a barrel in February this year.

Asked whether Norway, non-OPEC country, might follow the suit out of goodwill and also reduce its output, Mørland ruled it out by saying that "Norway is not planning any production measures".

The deal by OPEC members became possible much due to a shift in Saudi Arabia position. While initially Riyadh had insisted that it would reduce output to ease a global glut only if every other OPEC and non-OPEC producer followed suit, this time it agreed to exempt some countries from the limits with Saudi Energy Minister Khalid Falih saying that Iran, Nigeria and Libya would be allowed to produce “at maximum levels that make sense".

Iran insisted for a long time that it wouldn't subscribe to any cuts as the country is recovering from economic sanctions, that were lifted on Iran just earlier this year. Libya and Nigeria got the preferences as both countries have had some of their oil facilities damaged by terrorist attacks in recent months.

Norway is the world's 15th oil producer with 1904.0 barrels of petroleum and other liquids extracted in 2015, according to the US Energy Information Administration.