OPEC extends production cuts by 9 months

Another nine months of production cuts to try to make a clear turn in the oil market, which until now has not yielded convincing recovery. Is what the Opec announced on thursday at the end of Vienna negotiations, after November’s landmark deal failed to clear a global supply overhang.

Vienna meetings reached agreement among the representatives of the producer countries gathered in the Opec cartel, headed by Saudi Arabia and supported by other major producers, including Russia: crude oil will be pumped at a reduced pace until March 2018.

The meeting was held six months away from the agreement that had put together for the first time the 24 major producing countries (those of the cartel and others eleven) to cut 1.8 million barrels per day the production of black gold, in an attempt to push the price high, by subtracting raw material from the market.

In a press conference shortly after the announcement, Khalid Al-Falih, Saudi Arabia’s energy and industry oil minister, said:

We considered various scenarios, from six (months) to nine to 12 and we even considered options for a higher cut… All indications are solid that a nine-month extension is the optimum and should bring us within the five-year average by the end of the year.

However, stockpiles remain high and production from non-participating countries, including the U.S., has been rising, capping crude some way below the $60 a level earmarked by OPEC’s de-facto leader, Saudi Arabia.

Indeed, since the first deal in November, the recovery in US production has mitigated the upward pressure on crude oil prices. With the 20% increase in quotations in just a few days, it was convenient for US manufacturers to reopen the taps that had been closed due to higher average production costs and the need for higher prices to compete in the international energy match.

Star and strip production rose to 9.32 million barrels a day last week, an increase of 550,000 this year: it means that nearly one-third of the effect desired by OPEC was swept Away from American production. Over the last ten months, the number of shale plants in operation has risen from a minimum of 262 to over 700. Paradoxically, the move taken by the cartel has put in place the main enemies on the international chessboard

Our News

Canadian Oil Group strategies to reduce Reliance on U.S.

Since U.S. President is spoiling the American relationship with its neighbour to the north, the Canadian oil industry’s biggest trade group is looking for ideas to reduce its dependence on...

Read More

New well in North Sea for Equinor and Partners

Equinor and partners Lundin and Spirit Energy have struck oil in a wildcat well drilled in the central part of the North Sea Equinor, former Statoil has just made a new...

Read More

Good news for Brazil’s economy: Equinor and Exxon partnered for big Oil Auction

Oil companies Exxon and Equinor become partners at a field off the coast of Brazil thus generating a boost for Brazil’s economy, after weeks of political uncertainty. A consortium of Equinor,...

Read More

Lebanon starts Offshore Oil and Gas Exploration

The first phase of exploration in Lebanon’s potential offshore oil reserves has started Lebanese Energy and Water Minister Cesar Abi Khalil has approved an exploration plan submitted by a consortium of...

Read More

World’s Largest Oil Traders are competing to buy Petrobras’ Nigerian assets

Vitol, Glencore, and Shell are in the running to buy the Nigerian oil assets of Brazil’s state oil firm Petrobras The world’s three largest oil traders are competing to buy the...

Read More

Venezuela suffers but his president buys Oil for Cuba

Maduro buys $440 million foreign oil and send it to Cuba on friendly credit terms while Venezuelans starve. Venezuela has been buying foreign crude to continue supplying political allies such as...

Read More

Shell and Total to develop gas project in Oman

Total and Shell as operators will develop several natural gas discoveries located in Oman. Oman, the biggest Middle East oil producer outside Opec, signed two separate agreements with France’s Total and...

Read More

Poland Cuts Russian Oil Import Dependence

Poland is reducing its dependence on imports from Russia but at a cost Last year Poland’s imports of Russian oil dropped to their lowest level since 2005, according to a report...

Read More

Iran Oil Show 2018

At the exhibition Iran stressed the importance of Iran’s role in the energy market and the will to keep low oil prices. Over 4,000 domestic and foreign companies are participating in...

Read More

Eni, new oil discovery in Egypt

Italian oil company Eni announced an oil discovery in the Egyptian Western Desert. Eni has announced a new oil discovery in the Faghur basin, in the Egyptian Western Desert, 103 km...

Read More

Saudi Arabia needs oil at nearly $90 to balance its budget

Saudi Arabia’s efforts to revive economic growth are still dependent on oil prices, even as the kingdom tries to reduce its reliance on revenue from crude exports. Higher oil prices have...

Read More

Gazprom’s TurkStream reaches Turkish shore

With this new pipeline Russia will pump more natural gas into the European market. Russia’s Gazprom has completed the sea portion of the first line of the TurkStream offshore gas pipeline...

Read More

Become a partner

Our Partners


If you are interested in becoming a Dealoil partner please get in touch by emailing us at info@dealoil.co.uk. We look forward to hearing from you. The Dealoil team