The Organisation of Petroleum Exporting Countries (OPEC) finally agreed to cut daily output production to the tune of 1.2 million barrels from 1st January 2017. It was the first time since 2008 and after eight previous attempts that the oil cartel was able to come to an agreement to cut output in what experts have described as a victory for Nigeria. OPEC Secretary General Mohammed Barkindo, hardwork and diplomatic skills was largely responsible for the deal.
Nigeria, Iran and Libya were exempted from the output cut due to Production challenges. Non OPEC countries also agreed to cut production by 600,000 barrels with Russia commiting to cut production by 300,000 daily. OPEC President Mohammed Al-Sadi made the announcement on Wednesday in Vienna after OPEC,s 171st meeting. “We knew re-balancing the market will need courageous decisions from OPEC, with the support of some key non-OPEC countries. We agreed to share the reduction among OPEC countries, taking into consideration that some countries needed to be given special considerations because of their peculiar circumstances,”Al-Sadi said.
The deal is expected to help ailing economies of OPEC member states who have seen dwindling revenues from crude oil sales due to a sharp drop of crude oil prices since early 2015. OPEC’s president sounded this note in announcing the deal. “This a major step forward to re-balance the market and reduce the stock overhang, which will be fair to both consumers and suppliers and ensure that the economy is moved to a healthier level of inflation and growth,” the oil cartels president concluded.