Iran and Saudi Arabia have reached oil heavyweight compromise, according to Iraq’s oil ministers. The prices rose to around five percent.

OPEC+ Subsidy Agreement

At the OPEC consultations on a reduction of the oil production, an agreement is within reach. The oil cartel has agreed on a cut of around 800,000 barrels a day, said Iraq’s oil minister on Friday at the meeting in Vienna. A group of other leading non-OPEC oil states, notably Russia, will be asked to contribute additional 400,000 barrels per day.

As a result, oil prices have risen sharply. The prices rose around five percent. A barrage (159 liters) of the North Sea Brent cost on Friday afternoon 63.04 US dollars. That was $2.98 more than on Thursday. The price of West Texas Intermediate (WTI) American crude rose from $2.32 to $53.81.

The agreement, according to Iraq’s Oil Minister, will last for six months and should be reviewed in April. Previously, Iran had given the go-ahead, according to an OPEC insider. There had been a compromise with the rival and OPEC heavyweight Saudi Arabia over an exemption from the country’s reduction. Iran was the last major obstacle to an agreement. The Islamic Republic requires exemption from US OPEC sanctions for US sanctions in the nuclear dispute. In order to dry up the agreement, consultations with a group of other leading oil states outside OPEC immediately followed, with Russia leading the way.

Earlier, the so-called “OPEC+” combined producing countries, including Russia, had long struggled for an agreement. Recently, only a cut in a volume of one million barrels a day had been in the discussion.

Sources: Die Presse

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