OPEC, Russia agree to cut oil production

ERBIL (Kurdistan 24) – Major oil producers, including the Organization of the Petroleum Exporting Countries (OPEC) and Russia, agreed to cut global oil production by 1.2 million barrels a day (bpd) on Friday, causing an immediate boost in oil prices, as reported by the Associated Press.

"This is a major step forward," said United Arab Emirates’ Energy Minister Suhail Mohamed al-Mazrouei, who chairs regular OPEC meetings in Vienna.

The decision came three days after Iraqi Oil Minister Thamer Ghadhban said that OPEC should devise a long-term strategy to stabilize the price of crude oil and reduce damage to oil markets affected by geopolitics. 

Iraq, OPEC’s second-largest oil producer following Saudi Arabia, almost entirely relies on oil to generate its revenue. Over the past few years, the country has faced budget deficits due to the market’s unstable oil prices. 

Iraqi officials have been lobbying for a cut in production in recent months, in contrast to US President Donald Trump, who has been publicly pushing for the opposite. On Wednesday, he tweeted, "Hopefully OPEC will be keeping oil flows as is, not restricted. The World does not want to see, or need, higher oil prices!"

Following two days of meetings, OPEC said they would cut 800,000 barrels per day for six months from January, though some countries such as Iran, which is facing US sanctions, have been given an exemption. The balance, wrote AP, will come from Russia and other non-OPEC countries.

The price of oil has fallen roughly one fourth recently as a result of major producers such as the US pumping oil at increased rates. 

In mid-November, the Federal Government of Iraq restarted exports of Kirkuk oil to Turkey through the Kurdistan Region after a year of disruption following the 2017 Kurdish independence referendum.