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OPEC agrees to cut crude oil production to 32.5-33 mbl/d

The Organisation of the Petroleum Exporting Countries (OPEC) has reached an agreement to cut crude oil production by around 700,000 bbl/d, to a range of 32.5 - 33 mbl/d; current production is estimated at 33.224 mbl/d.



This is the first agreement to limit production since 2008, in an attempt to raise global prices, which have more than halved from over US$100/bbl in June 2014 due mainly to a soaring US shale oil production. The agreement will be finalised at the OPEC policy meeting in November 2016, when production levels for each member country will be specified. The OPEC will now seek support from non-member oil producers, such as Russia. Iran, which had announced that it would return to its pre-sanction production levels (around 4 mbl/d) before considering any cut in output, also signed the agreement.



The announcement has already resulted in a nearly 6% increase in Brent prices at US$48.69/bbl, while US WTI price rose by 5.3% at US$47.05/bbl.