OPEC and its allies agreed at the end of last week to deepen its oil output cuts even further from the start of next year with a new deal that will see output cut by an extra 500,000 barrels a day in the first quarter of 2020.
OPEC and Non-OPEC allies agreed to implement the tighter oil production policy at OPEC's bi-annual meeting in Vienna on Friday.
In a press statement, OPEC said: “This additional adjustment would be effective as of 1 January 2020 and is subject to full conformity by every country.
OPEC and its allies have been limiting their production since 2017. Their existing agreement aimed to remove 1.2 million barrels per day from world markets and is due to expire in March 2020.
OPEC said that it will review the policy at an extraordinary meeting on March 5-6 next year.
Saudi Arabia’s Energy Minister Prince Abdulaziz Bin Salman said on Friday that the Kingdom’s quota would be an additional 167,000 bpd through to March 2020. Abdulaziz added that his country would also extend a voluntary cut of 400,000 bpd. This would take the deal’s total production cuts to 2.1m bpd, or more than 2 per cent of global demand.