15:32 | 03/07/2019 Global Economy
The Organization of the Petroleum Exporting Countries (OPEC) and Non-OPEC oil producers agreed in Vienna on Monday (July 1) to extend the output cut by nine months, according to the Xinhua.
Meanwhile, the Reuters reported that the OPEC members on July 1 agreed to extend oil supply cuts until March 2020 as the group's members overcame their differences in order to prop up the price of crude amid a weakening global economy and soaring US production.
Benchmark Brent crude has climbed more than 25% so far this year after the White House tightened sanctions on OPEC members Venezuela and Iran, slashing their oil exports.
Brent rose as much as US$2 on Monday towards US$67 per barrel as traders cited OPEC's resolve to curb output.
The OPEC meeting on Monday will be followed by talks with Russia and other allies, a grouping known as OPEC+, on Tuesday (July 2).
Russian President Vladimir Putin said on June 29 he had agreed with Saudi Arabia to extend existing output cuts of 1.2 million barrels per day, or 1.2% of global demand, until December 2019 or March 2020.
Oil prices could stall as a slowing global economy squeezes demand and US oil floods the market, a Reuters poll of analysts found.
"I think nine months gives us enough runway to wait for the market to balance," Saudi Energy Minister Khalid al-Falih said.
He said Saudi Arabia would continue reducing supplies to customers in July.
Iran's exports plummeted to 0.3 million barrels per day in June from as much as 2.5 million bpd in April 2018 due to Washington's fresh sanctions.
The sanctions are putting Iran under unprecedented pressure. Even in 2012, when the European Union joined US sanctions on Tehran, the country's exports stood at around 1 million bpd. Oil represents the lion's share of Iran's budget revenues.