For the first time since 2001, non-OPEC countries on 10 December 2016 agreed to join the supply cuts in order to overcome the major obstacle for a global agreement to curb output. The decision was taken during a meeting of the Organization of Petroleum Exporting Countries (OPEC) in Vienna.
These eleven oil-producing countries, who are not members of the OPEC oil cartel, include Azerbaijan, Oman, Mexico, Sudan, South Sudan, Bahrain, Malaysia, Equatorial Guinea, Bolivia, Kazakhstan and Russia.
Highlights of the Agreement
- The non-OPEC countries agreed to reduce their oil production by 558000 barrels a day.
- OPEC members also confirmed their commitment to reduce the oil supply by 1.2 million barrels a day.
- Together OPEC and non-OPEC countries will cut the oil production by about 1.7-1.8 million barrels a day.
- The agreement is designed to speed the end of the oil downturn by controlling the excess supplies and boost prices, providing some relief to resource-rich nations.
- It will accelerate the stabilisation in the markets.
- A committee was also constituted to monitor producers’ cuts that will start from 1 January 2017 for six months. It will consist of three OPEC members and two non-OPEC countries.
Breakdown proposed by non-OPEC countries
- Russia to cut 300000 barrels a day
- Mexico to cut 100000 barrels a day
- Kazakhstan to cut 50000 barrels a day
- Oman to cut 45000 barrels a day
- Azerbaijan to cut 35000 barrels a day
- Malaysia to cut 35000 barrels a day
- Bahrain to cut 12000 barrels a day
- Equatorial Guinea to cut 12000 barrels a day
- South Sudan to cut 8000 barrels a day
- Brunei to cut 7000 barrels a day
- Bolivia to cut 4000 barrels a day
- Sudan to cut 4000 barrels a day
- Formed in 1960, OPEC coordinates the energy policies of member countries who produce about one-third of the world's oil.
- Its members include Algeria, Angola, Ecuador, Gabon, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, UAE and Venezuela.
- A number of other major oil-producing nations such as the United States and Russia are not OPEC members.