OPEC agree on oil-cuts extension to end of 2018

OPEC agreed to extend its oil-production cuts to the end of next year as the job of rebalancing the market is not yet done, according to delegates at a ministerial meeting in Vienna.

Talks have now moved on to the mechanism that will be used to review the agreement in mid-2018, the delegates said, asking not to be identified as the closed-door discussion isn’t yet over. Ministers also need to get Russia, their largest non-OPEC ally, on board at a meeting with other partner countries later on Thursday. 

The outcome of the day’s initial gathering, comprising just OPEC ministers, reflects a rare consensus between members of the Organization of Petroleum Exporting Countries, with no dissonant voices in the run-up to the meeting. All agreed that the market is moving in the right direction, but is not yet balanced. While Moscow has voiced its support for an extension, it is said to want assurances on how and when the agreement will be phased out, Bloomberg reported.

Even rivals Saudi Arabia and Iran appeared on the same page going into Thursday's meeting. "My preference is to go for a 9-month extension," Khalid Al-Falih of Saudi Arabia said, while Bijan Namdar Zanganeh, his Iranian counterpart, said the meeting will "reach agreement about rolling over" the supply cuts.