Russian Minister of Energy Alexander Novak (on screen) at the meeting of the Organization of the Petroleum Exporting Countries (OPEC), December 7, 2018 in Vienna, Austria (AFP / JOE KLAMAR)
OPEC and its allies led by Russia will lower their production by 1.2 million barrels a day for the next six months, according to the terms of an agreement sealed Friday that has given color to oil, risk of irritating US President Donald Trump.
This objective, eagerly awaited by the markets, will be distributed to the tune of 800,000 barrels per day for the fourteen OPEC countries and 400,000 for its ten partners, including Russia, the organization said at a press conference. is held at its Vienna headquarters.
The reduction, corresponding to just over 1% of global production, is intended to rebalance the market and halt the fall in prices, which have fallen by 30% in two months in a context of chronic overproduction.
After a difficult week, at the pace of delicate negotiations between producers, the price of a barrel of Brent recovered sharply, taking 2.64 dollars to 62.70 dollars at 17.15 GMT (+ 4.43%).
The recent price drop was consumer-friendly and well-received by President Donald Trump who wants to spare American motorists. But the major global exporters dependent on oil revenues, first and foremost Saudi Arabia and Russia, hope to turn the tide.
– Spread the effort –
The decline "should help the market to reach a balance sooner," said Russian Energy Minister Alexander Novak, whose country is the world's second largest producer, acknowledging that the talks had been "complex".
OPEC crude oil reserves (AFP / AFP)
It has taken two days of official meetings for the various heavyweights to give their violins in this alliance formed in 2016 between OPEC and ten other producers, including Russia which is by far the largest.
Talks were stumbling over the allocation of declining quotas, with each producer demanding efforts from his partners.
Russia felt it was "difficult" to reduce its supply in the middle of winter given the needs of the country at that time.
Saudi Arabia, the world's third largest producer, is facing US pressure at a time when the kingdom is weakened by the diplomatic repercussions of the Khashoggi affair.
US President Donald Trump demanded Wednesday that OPEC, which pumps a third of the world crude, it maintains its production at a high level. Saudi Energy Minister Khaled al-Faleh said that the recent surge in Saudi output, sometimes interpreted as a move towards Washington, "was not political."
– Hazards –
The balance between supply and demand is difficult to reach, and OPEC will meet next April to assess the effect of these new production cuts, which come into effect in January.
Holding a hard line, and geopolitical rival of the kingdom, Iran has got to be exempted from production cuts, as were Libya and Venezuela, three countries whose oil industries are suffering serious disruption.
"These exemptions mean that all the other countries will have to make a little extra effort," said UAE Minister of Energy Souheil al-Mazrouei.
It is difficult to predict whether OPEC and its allies, who account for more than half of the supply, will be able to sustainably reverse price movements, but "such a fall in production will tighten the balance of the oil market from third quarter of 2019, "said analysts at the consulting firm Wood MacKenzie.
"The decline was necessary to stabilize prices," they summarized, especially in the perspective of a slowdown in global growth and while the Americans, the world's largest oil producer, pump up all the time.
The last few months, however, have shown that nothing is always going according to plan.
But US temporary last-minute exemptions to eight importing countries have contributed to the plunge in prices, erasing gains made since early 2017.
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