“We do so willingly and we do so for the purpose of supporting our economy, the economies of our colleagues,” Saudi Energy Minister Prince Abdulaziz Bin Salman said at a news conference.
“We have not asked any country to come forward and make any cuts,” he said.
At the same time, Russia and Kazakhstan’s cuts will slow down and allow the countries to produce more oil over the coming months.
The U.S. oil price rallied higher in response to the deal, rising 5.2%, or $ 2.48 to $ 50.10 a barrel early in the afternoon.
“It is very surprising that Riyadh intends to cut its output, as it could mean that it is willing to avoid market share,” said Bjornar Tonhaugen, head of oil market research at Saudi Arabia is more than making up for Russia and Kazakhstan is increasing output, bearing most of the burden for maintaining stable output.
Initially the group did not agree on yield levels for February at Monday’s meeting.
But new variants of the seemingly more portable coronavirus have been found in many of the world’s largest economies, raising fears that governments could impede travel and public life. On Monday, Prime Minister Boris Johnson ordered the United Kingdom back to be a real lock in hopes of disrupting the country’s health system. Germany is considering extending its lock.
There are also concerns about the speed of vaccine circulation. Even in countries that have had early access to doses, including the United States and the United Kingdom, it is taking longer than expected to vaccinate the most vulnerable.
Most countries in the OPEC + group supported rolling over production levels since January, but Russia wanted another rise of 500,000 barrels per day, an OPEC source told CNN Business Tuesday .
“I urge you today not to acknowledge the progress we have made as an organization over the past year,” said the prince in his opening remarks. risk everything we have achieved for the immediate benefit, but malicious. “
Louise Dickson, an oil markets analyst at Rystad Energy, said two clear groups have emerged within the OPEC + group.
“The split is a blow to the alliance, reiterating the question of whether its members, with very different agendas and product structures, can continue to work together,” Dickson said. more often than not, an agreement will eventually be agreed. “
Now, rising production despite weak demand could cause prices to fall. But some representatives of the group are concerned about giving market share to competitors including U.S. coal miners. Dickson said those fears seem to have been overshadowed.
“A month of narrower results from OPEC + will not bring the balance so far so that the cartel will not be able to dig barrels back from carbon in a month,” she said in a research note.
– Anneken Tappe contributed to this report