OPEC extends oil production cuts to end of 2018

Members of the Organisation of Petroleum Exporting Countries (OPEC) have agreed to extend oil production cuts to the end of 2018.

This decision was made on Thursday at the 173rd OPEC conference which held in Vienna.

“I am pleased to announce that the decision has been unanimous. It’s a solid decision… which is to roll over and extend the deal through the end of December 2018,” said Khaled al-Falih, Saudi Arabia’s energy minister.

It was also agreed that Nigeria and Libya should still be exempted from production cuts but both countries were advised to cap production.

Bijan Zanganeh, Iranian oil minister, told reporters that a figure was not agreed on but the meeting advised them to keep production at 2017 levels.

Both countries had been exempted from the agreement, which was first decided on in December 2016 but took effect in January 2017, because their production levels were unstable as a result of internal unrest.

The agreement was reached as part of efforts to end a global oil glut that saw oil prices drop to as low as $29, a dip that Mohammad Barkindo, OPEC secretary general, described as the worst in the history of the industry.

Russia, a non-OPEC member who joined in the agreement, had expressed willingness to exit the agreement in 2018 on fears of a market deficit or that US shale production would make up the difference.