The group of major oil-producing countries known as OPEC Plus agreed on Sunday to embark on a complex effort to adjust production as it aimed to halt the recent slide in oil prices, including an additional cut in output of one million barrels a day by Saudi Arabia.
The Saudi cut would be for one month beginning in July, but could be extended.
The group, which includes Russia and its allies, was under pressure to produce a deal to reverse the pessimism that has dominated the oil market in recent weeks. Despite two substantial output cuts since October, the price of oil has drifted about 15 percent lower over the past seven months.
The agreement, the result of lengthy negotiations on Saturday and Sunday, reworks the output quotas of several countries, with the United Arab Emirates gaining and some others losing production levels. “This is definitely not a clean and simple deal,” said Richard Bronze, head of geopolitics at Energy Aspects, a research firm.
The agreement includes a voluntary cut of 500,000 barrels a day that Moscow announced in February.
Comments at the news conference after the meeting revealed skepticism that Russia was abiding by those lower production levels. High Russian production levels, and its increased share of Asian markets including India, often at the expense of Middle East oil producers, have become a sensitive issue in the group.
Some of the data “from Russia just does not add up,” said Suhail al Mazrouei, the oil minister of the United Arab Emirates. He said Russian officials “are reaching out to explain the numbers.”
OPEC Plus, in a statement, said that it was acting “to achieve and sustain a stable oil market,” and that it was continuing its recent approach of being “proactive, and pre-emptive.”
As far as the markets are concerned, the key feature of the agreement is the additional production cut by Saudi Arabia, which would bring its daily output to about nine million barrels a day. The Saudi oil minister, Prince Abdulaziz bin Salman, called the move “the Saudi lollipop” while announcing it during the news conference.
After suggesting that cuts were in the offing before the meeting, Prince Abdulaziz wound up being the only official to agree to take an immediate hit.
He may have won some long-term concessions. With this agreement, OPEC Plus is trying to address longstanding discrepancies that have made some of the group’s production decisions almost incomprehensible. For instance, some oil producing countries including Nigeria and Angola have for yearsnot been able to meet their targets because of insufficient investment and other issues. They are taking hits to their quotas, starting in 2024.