VIENNA: Russia and several other non-Opec nations have pledged to curb oil production next year by more than 600,000 barrels a day, joining forces with Opec to end a global glut, said delegates attending talks on Saturday.
The pact -- the first between the two groups in 15 years -- comes two weeks after the Organization of Petroleum Exporting Countries agreed to reduce its own production to 32.5 million barrels a day or about 4.9% from current levels reported to be around 34.2 million.
It is unclear whether the non-Opec cuts include natural declines from countries such as Mexico, or consist entirely of genuine production cuts.
"We managed to gather 25 countries from Opec and non-Opec [states] with the idea of stabilising the oil market and defending a fair price for our commodity," Venezuelan Energy Minister Eulogio del Pino said before the meeting in Vienna, where Opec has its headquarters.
Russia had already announced that it planned to reduce production by 300,000 barrels a day next year, down from a 30-year high last month of 11.2 million barrels a day. In a surprise move, Kazakhstan pledged a modest output cut after coming under strong diplomatic pressure, delegates said, asking not to be identified before an official announcement.
The International Energy Agency had expected the central Asian country to increase production in 2017 by 160,000 barrels a day after a giant oilfield started pumping.
The agreement represents the strongest effort yet by oil-rich countries, from giants such as Saudi Arabia and Russia to tiny producers including Bolivia and Equatorial Guinea, to end a market share war that has shaken investors, hit energy companies and damaged economies.
Oil prices have surged more than 15% since Opec announced it will cut production for the first time in eight years, rising this week briefly above $55 a barrel. Although prices are well below the $100 level that prevailed when the market share war started, they have more than doubled since January.
The price rise has brought breathing space to oil-rich economies and propelled the share prices of energy groups from major companies such as Exxon Mobil Corp to shale firms such as Continental Resources. If Opec and non-Opec countries stick to their promises, the oil market could turn into a deficit by the second half of the year, boosting prices.
Saudi Arabia, Opec’s de facto leader and the world’s top oil exporter, has long insisted that any reductions from the group should be accompanied by action from other suppliers.
Opec production in October was 33.7 million barrels a day, well above the target of 32.5 million the group aims to enforce starting in January. Libya and Nigeria are exempted from the cuts, while Iran has some room to boost its output to the levels seen before sanctions, now lifted, were imposed.
Riyadh this week informed customers in Europe and North America that it would supply less oil in January than December, reassuring Russia and others in the non-Opec camp that the oil club is making good on its cuts. The United Arab Emirates said on Saturday that it would take similar action.