OPEC + countries voted in favor of joining the OPEC decision to extend the oil output cut deal for nine months while maintaining the quota of the old agreement.
"Thank you very much; I believe that we have now joined the decision that was made yesterday," Russian Energy Minister Alexander Novak said after all the delegates raised their hands in support of the decision.
"Now we can proceed to signing the document," TASS cited the minister as saying.
After that, the OPEC Charter was signed.
OPEC member nations agreed to the extension yesterday. With strong backing from Russia the others unanimously approved the proposal.
The current deal to support prices reduced production by 1.2 million barrels per day starting from January 1 for six months, and will now run into next year with the extension. OPEC members slashed production by around 800,000 barrels per day while the 11 non-OPEC members agreed to reduce production to 400,000 bpd. The cuts were aimed to put upward pressure on the price of oil and reduce oversupply.
A leading analyst of the National Energy Security Fund, a lecturer at the Financial University under the Government of the Russian Federation, Igor Yushkov, speaking to Vestnik Kavkaza, noted that extending the deal may result in a slight increase in oil prices, but mainly it will ensure the stability of the market.
"In the current format, the deal seeks to reach the volume of oil production, which, on the one hand, will maintain its price at a level that allows all participants to balance budgets (that is, $50-60 per barrel), and on the other hand, to prevent the price from rising significantly, even to $75-80 per barrel, because at this level American shale projects will seriously involve in production. Based on these two reasons, OPEC + is trying to find a balance and keep prices in the corridor of $50-70 per barrel," Igor Yushkov pointed out.
"So far it has been successful, therefore, it’s not expected that the oil price will increase significantly in the next six months. In general, the agreement does not rule out other factors, for example, if the Strait of Hormuz is closed, the price can easily rise to $200 per barrel," the leading analyst of the National Energy Security Fund, a lecturer at the Financial University under the Government of the Russian Federation concluded.