The OPEC oil-producing countries and ally Russia said Friday they have agreed to cut their crude production by an extra 500,000 barrels a day as they try to support global energy prices.
The decision came after long discussions at the OPEC headquarters in Vienna. The group’s goal is to to support the price of energy. But they also do not want to lose global market share to the United States, which keeps pumping more oil.
“We have decided to reduce production by 500,000 barrels a day through the first quarter of next year,” said Russian energy minister Alexander Novak.
The cuts come on top of a reduction of 1.2 million barrels a day that they have been observing for the past three years.
The sticking point in the talks appears to be how to share the cuts among the 14 OPEC countries and nations like Russia that have been coordinating their production with the cartel in recent years.
Saudi Arabia has been bearing the burden of the largest share of production cuts recently. But some countries including Iraq and Russia have been producing more than their expected.
Analysts note that if countries are already not complying with the current agreement, voting for more cuts could be pointless.
The price of oil had risen in recent days on expectations for a production cut and gained further on Friday. Brent, the international benchmark, jumped 82 cents to $64.21 a barrel. The U.S. benchmark gained 75 cents to $59.18 a barrel.
Even if members of the cartel cut production, there is more oil coming to market from non-OPEC nations, including the U.S., Canada, Brazil, Norway and Guyana. That could make up for any cuts from OPEC and Russia, who will also be wary of not losing global market share by cutting output too much.