Production Cuts or Recharging for Growth as Russia, Azerbaijan, and Kazakhstan Make Statement in Concert with OPEC

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At the November OPEC meeting in Vienna, Russia delivered many surprises. Not only did the country broker an agreement between rival Saudi Arabia and Iran, but Russia also committed itself to substantial production cuts. For almost a year, Russia signaled that it would only freeze its ever-growing production as part of OPEC-led production stabilization scenario. The decision to cut 300,000 bd of crude output in the first five months of 2017 was a noteworthy departure from Russia’s earlier strategy and was much welcomed by markets sending global crude prices climbing. By mid-December, Russia and Saudi Arabia persuaded additional 10 non-OPEC countries, including major FSU producers Kazakhstan and Azerbaijan, to participate in the deal with additional 258,000 bd of committed production cuts.

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