OPEC agrees to first output cut in 8 years

The Organisation of Petroleum Exporting Countries (OPEC) has agreed to the very first oil output cut in eight years.

The oil cartel, which is currently meeting in Vienna, Austria, has not officially confirmed the deal, but news agencies on ground, and delegates who are party to the deal, say an agreement is already in place.

According to Reuters, Saudi Arabia, the biggest OPEC producer, agreed to take a big hit, to accommodate Iraq’s reluctance, while  Iran has agreed to a  cut.

Bloomberg is also reporting that the cartel agreed to cut production by 1.2 million barrels per day, with hopes that oil will trade above $50 a barrel for the days ahead.

Speaking at the opening of the 171st ordinary meeting, Mohammed Bin Saleh Al-Sada, OPEC conference president, expressed optimism that the deal would become a reality, considering work done since the Algiers accord was consummated.

“As the history of OPEC has shown and as many of our predecessors will no doubt acknowledge, the road to success is not always easy to navigate,” Al-Sada said.

“However, as we have shown over the past few months, with hard work, drive and commitment from all of us, we can overcome challenges and obstacles through cooperation and compromise.

“I feel we have already taken great steps to shape a fair and common understanding among us all.  And I have the sense that everyone here remains committed to ensuring we find the solutions needed to implement the ‘Algiers Accord’.

“We all have a common goal of developing a lasting solution that brings forward the rebalancing process, reduces the length of the downturn, lessens volatility and stabilizes the market.”

OPEC is expected to address a press conference by 4pm Nigerian time.