OPEC, Russia agree to slash oil output despite Trump pressure

OPEC, Russia agree to slash oil output despite Trump pressure

OPEC, Russia agree to slash oil output despite Trump pressure

Yet, the deal Khalid Al-Falih hammered out to reduce production by 1.2 million barrels a day, which sent oil prices soaring on Friday, was based on Saudi Arabia shouldering the lion's share of the cuts. Oil prices jumped about 5 percent to more than $63 a barrel by 15:00 GMT as the combined cut was larger than the minimum 1 million barrels per day target markets had expected.

Based on the OPEC+ announcement, Saudi Arabia will shoulder most of the cut that is 800,000 bpd while Russian Federation, which has been an important player in global oil markets, and other non-OPEC producers will bear the rest.

In a closely watched monthly oil-market report released Wednesday, OPEC reported an 11,000 barrel-a-day decline in crude output last month, to average 32.97 million barrels a day.

Although the U.S. awarded last-minute sanctions waivers to major importers of Iranian oil, Iran began under-reporting its official export levels in mid-September, in an effort to evade sanctions. The US had sought a reduction in oil prices. It also proves that Russian Federation has become a powerful voice at the table in the two years since OPEC+ was first formed.

Worldwide benchmark Brent crude was trading at $59.53 at 12.50 p.m. EST (1750GMT), and American benchmark West Texas Intermediate (WTI) was at $51.18.

"President Trump will not be happy to see today's headlines, but how strongly he reacts depends mainly on whether crude prices rise strongly as a result in coming days and weeks".

The Trump administration has supported that transition by opening new public land to drilling and loosening restrictions on public and private oil and gas production, with "energy independence" as a frequent talking point.

With pressure from Trump, Riyadh could propose OPEC+ lower production by 1 mbpd not to aggravate the USA president.

OPEC members, including Saudi Arabia, will curb output by 800,000 barrels per day.

He added: "The fact that the OPEC-Russia alliance is still holding matters as much as the details of the deal itself".

But with the U.S. Senate determined to punish Saudi Arabia for the killing in October of journalist Jamal Khashoggi, a U.S. resident and prominent critic of the Gulf kingdom's Crown Prince Mohammed bin Salman, some Western diplomats and analysts aren't so sure that the Saudi-led cut was without a political motive.

Oil prices have fallen from a four-year high above $86 a barrel in early October on concerns over excess supply.

"The commitments made under this proactive collaboration between participating countries are to be voluntarily implemented, non-binding and would not in any way affect the rights of peoples and nations to permanent sovereignty over the exploitation and management of their natural resources", he said.

Mohamed Azmin said this decision is a testament of Malaysia's commitment to worldwide cooperation in facing economic challenges posed by the global oil market.

Al Falih told reporters in Vienna that OPEC will seriously consider views of world leaders like Modi, who represent the voice of major consuming nations, before taking a decision on cutting output.

The Saudi government threatened to retaliate against any punishment such as economic sanctions, outside political pressure or even "repeated false accusations" about the Khashoggi killing, although it walked back the threat subsequently following signs that the Trump administration had no appetite for imposing sanctions on the long-term US ally.

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