Opec allies endorse 1 million bpd rise in oil output
Final agreement means Saudi Arabia and Russia now have the flexibility to respond to disruptions and moderate prices
Major oil producers outside Opec - including Mexico and Kazakhstan - met ministers from the group in Vienna on Saturday and endorsed a nominal output increase of 1 million barrels per day, said Carlos Perez, Ecuador’s Minister of Hydrocarbons.
Following the meeting, Angolan Oil Minister Diamantino Azevedo said: "We have agreed."
The increase was described as “nominal” by Saudi Energy Minister Khalid Al Falih.
In real terms, that would add 600,000 to 700,000 bpd of crude to the market over about six months, said Oman’s Oil Minister Mohammed Al Rumhy, according to Bloomberg.
Saturday's deal, after a third day of talks, is a win for Saudi Arabia and Russia, which hold the most spare capacity and were the first members to suggest an increase. They now have the flexibility to respond to disruptions and moderate prices at a time when US sanctions on Iran and Venezuela threaten to throw the oil market into turmoil.
The agreement came after Opec announced on Friday a commitment to increase output without saying which countries would increase or by how much. The official communiques from both meetings did not mention specifics, instead pledging that the group would focus on restoring its output cuts to the level originally agreed in 2016. Following the Friday announcement, Brent crude rose $2.50 to finish at $75.55 a barrel, while the US benchmark West Texas Intermediate gained $3.04 at $68.58 per barrel.
Earlier on Saturday, Suhail Al Mazrouei, Minister of Energy and Industry and President of the Opec Conference, said fluctuations in oil prices do not serve producers or consumers.
"Our goal is to rebalance the world oil market by striking a balance between demand and supply," he said, according to state news agency, Wam.
He added the UAE has been committed to production cut under the Declaration of Cooperation with a conformity of 109 per cent in May, while compliance of Opec and non-Opec participants collectively reached nearly 147 per cent for the same month.
Updated: June 24, 2018 10:43 AM