On Monday, Saudi Aramco (Saudi Arabia’s giant national oil company) confirmed that it would abide by its production cuts under the Vienna Accord, OPEC’s deal to cut oil production.
The Saudi commitment is to lower its oil supply by 300,000 barrels a day, and the production action took effect with deliveries this month.
This latest announcement now allows the pact to extend into February.
The Vienna Accord was announced by OPEC on November 30 and marks the first time in years the cartel has taken such an action. Subsequent negotiations with non-OPEC producers, especially Russia, resulted in a breakthrough aimed at improving global crude oil prices by reducing supply.
With the other two leading OPEC producers – the United Arab Emirates and Kuwait – also meeting (or in the case of Kuwait exceeding) their required production cuts, the Accord now has a chance of extending the positive impact of rising prices.