Saudi Arabia has struck a deal that will see Opec and its allies increase oil production by about 1m barrels a day in a bid to cool a rally in crude prices to their highest price level since 2014, The Financial Times reported on Friday .
Khalid al Falih, the kingdom’s energy minister, said as he left Friday’s meeting in Vienna that the 1m barrel agreement would allow countries with spare production capacity to boost output.
The deal was reached despite opposition earlier this week from Iran, which complained that raising output in response to calls from the US and other producers was tantamount to doing the bidding of US President Donald Trump, before softening its position.
The 1m b/d figure was not included in the final statement from the meeting suggesting a possible concession to Iran. But it was confirmed by various ministers from countries including Saudi Arabia, Iraq and Nigeria. “It will be 1m collectively,” Mr Falih said.
Nigeria’s oil minister Ibe Kachikwu said the 1m agreement would see Opec members raise output by at least 700,000 b/d, with non-Opec countries — led by Russia — adding the rest.
The group is expected to review the impact of the increase in September. Russia and other non-Opec countries participating in the deal are due to meet tomorrow but are widely expected to rubber stamp it.
While oil prices have pulled back from the four-year high above $80 a barrel hit last month, they rose after the deal on Friday. Brent crude oil was trading 2 per cent higher at $74.58 a barrel.
Oil prices have risen above $80 a barrel in recent weeks as Opec and Russia-led supply cuts coincided with robust demand and unplanned outages from countries such as Venezuela.