Members of the Organisation of Petroleum Exporting Countries (OPEC) have agreed a deal to cut oil production.
The deal was agreed 48 hours after a gruelling meeting by respective representatives of the member countries.
The meeting which was held in Algiers, Algeria, on Wednesday, led to the agreement to cut oil production to 32.5 million barrels per day from around 33.24 million, with levels of output for each member country to be determined in November 2016.
The Director, Press, Ministry of Petroleum Resources, Idang Alibi said this will be the first time in eight years that OPEC would be reaching such an agreement.
OPEC member countries reached a consensus in the agreement where three countries are exempted from the production cuts and they include, Iran, which just had its economic sanctions lifted earlier in the year, Libya and Nigeria who have had some of their oil facilities damaged by terrorist attacks in recent months.
The Minister of State for Petroleum Resources, Dr. Emmanuel Ibe Kachikwu, who led Nigeria’s delegation at the meeting argued for the exemption of Nigeria from the production cut. The concession was given considering the recent challenges the country has been through due to vandalism of oil and gas infrastructure, which has negatively impacted the country’s ability to produce oil optimally in the recent past.
Global oil prices have been low due to its surplus in quantity, and OPEC countries have been concerned over this. The deal was brokered to tackle this.
This would definitely contribute positively to the revival of the economies of member countries presently undergoing challenges.
However, many of the details of the production cut deal are still being worked out by member countries and the group won’t decide on targets for each country until its next meeting scheduled at the end of November.