The oil ministers from the OPEC cartel and a group of non-OPEC partners agreed Thursday to extend crude output cuts until the end of next year in efforts to keep supplies tight and bolster oil prices.
The move reflects the success of their strategy of pumping less oil for more dollars.
Benchmark crude prices are now close to $60 a barrel, up almost 20 per cent since a year ago, when the Organization of the Petroleum Exporting Countries and their non-OPEC partners agreed to reduce supply by a daily 1.8 million barrels.
Announcing the decision after meetings Thursday, Saudi Arabian oil minister Khalid Al-Falih, OPEC’s president, exclaimed, “it’s been a great day.”
The move had been expected after bitter rivals Saudi Arabia and Iran appeared on the same page going into Thursday’s meeting.
Traditional tensions between the two nations have led to disarray in the past and have spiked in recent months, with their struggle for Middle East dominance potentially exacerbating different positions on oil.
The Saudis favour continued cuts, but Iran wants greater market share over the longer term as it claws back from the effect of more than a decade or sanctions that were lifted as part of its 2015 nuclear deal with six world powers. Now pumping below 4 million barrels a day, Iran has said it wants to add another 1 million barrels within three years.