Published: Tue, December 11, 2018
Finance | By Jaime Brady

U.S. Becomes Net Oil Exporter For First Time In 75 Years

U.S. Becomes Net Oil Exporter For First Time In 75 Years

Mazrouei said that the exemptions mean that the cuts introduced by other member states are "going to be a bit higher than just the average for everyone".

Heavyweight Saudi Arabia has been pushing a cut of about 1 million barrels a day, but the oil cartel was not able to make a decision on Thursday.

The last time the OPEC+ group agreed to curtail output, in late 2016, it settled on a combined 1.8 million-barrel-a-day reduction.

OPEC and its Russia-led allies agreed on Friday to slash oil production by more than the market had expected despite pressure from U.S. President Donald Trump to reduce the price of crude.

Ahead of the meeting Brent, the global standard, was down 59 cents at $59.47 a barrel while benchmark NY crude was 61 cents lower at $50.88.

But after hours of talks, Iran gave OPEC the green light and Russian Federation indicated it was ready to cut more.

The Organization of the Petroleum Exporting Countries (OPEC) and non-OPEC oil producers made the agreement in Austria's Vienna on Friday.

The gathering took place against the backdrop of oil prices having fallen a good 30 percent from more than $86 in early October.

The Trump administration imposed the second wave of sanctions against Iran in November in which a universal ban on the country's oil exports was cited as a primary objective.

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Furthermore, removing 1.2 million barrels of oil from the world markets will help the prices to go up again and this would help offsetting the value of Iran's lost barrels. Iran bluntly said not to accept any production cuts, especially if this would include Iranian production.

Cailin Birch, EIU's global economist, said, "We expect oil demand growth to slow in the coming months compared with 2017-18, as the global economic cycle starts to turn".

Prices fell nearly 3 percent on Thursday after OPEC ended a meeting in Vienna with only a tentative deal to tackle weak prices.

A Russian Energy Ministry source said Moscow was ready to contribute a cut of around 200,000 bpd - more than the initially suggested figure of 150,000 bpd.

Brent crude rose $1.61, or 2.7 percent, to settle at $61.67 a barrel.

The Russian Energy Minister, Alexander Novak, was quoted by Reuters as saying the decision to cut output was hard one for his country in view of the winter and the cold weather at Russian oil fields.

The move comes amid the second round of USA sanctions against Tehran that came into effect on November 5 following Washington's withdrawal from the Iran nuclear deal in May.

For the 11 remaining OPEC members - those who aren't exempt - the curbs will actually work out at 3 percent. American oil now accounts for more than one in 10 barrels of world crude production. Yet, it's a paper tiger achievement: In reality, the USA remains exposed to global energy prices, still affected by the old geopolitics of the Middle East.

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