VIENNA—OPEC representatives reached a deal to cut oil production after months of wrangling Wednesday, according to people familiar with the matter, in an effort to lift sagging prices and reassert the cartel’s influence over a market increasingly dominated by the U.S., Russia and others.
Delegates from the Organization of the Petroleum Exporting Countries agreed to cut production by 1.2 million barrels a day to 32.5 million, Iranian Oil Minister Bijan Zanganehsaid, representing about 1% of global production.
Brent crude, the global benchmark that had soared in anticipation of a deal, held on to earlier gains, trading 7% higher. OPEC members have said they were targeting prices as high as $55 to $60 a barrel, a level that would boost petroleum-dependent economies that have been badly damaged by two years of prices often below $50 a barrel.
Ahead of the meeting, Saudi Energy Minister Khalid al-Falih—whose country is OPEC’s largest producer—said that if the cartel were able to reach an agreement, it would reach out to non-OPEC oil producers to try to secure their cooperation in limiting global production. Any final agreement “has to involve OPEC and non-OPEC,” he said.
The breakthrough comes after months of on-and-off-again negotiations that made many traders doubt an agreement could be reached. As recently as Tuesday, oil prices tumbled on market skepticism that clashing OPEC members and other major oil producers could come together on a meaningful deal.
OPEC didn’t immediately release details of which countries will cut and by how much—factors that will decide how seriously the deal is taken.
Iran has told fellow OPEC members it would be willing to restrict its production in early 2017 after clawing back the market share it lost during years of Western sanctions, the officials said. Mr. Zanganeh said his country wouldn’t agree to stop ramping up production in the short term, though.
It isn’t clear how Saudi Arabia will react. Iran, which is in opposition to Saudi Arabia in conflicts in Syria and Yemen, wants to increase output to regain market share it lost when Western sanctions targeted its oil industry.
That said: How the heck can MH still be CEO?? Is IOC that crooked? MH can't go back to the bargaining table! He'll look like an idiot.
