OPEC and its allies agreed to extend most oil output cuts into April, offering small exemptions to Russia and Kazakhstan, after deciding that the demand recovery from the coronavirus pandemic was still fragile despite a recent oil price rally.
OPEC's leader Saudi Arabia said it would extend its voluntary oil output cut of 1 million barrels per day (bpd), and would decide in coming months when to gradually phase it out.
The news pushed oil prices back towards their highest levels in more than a year with Brent trading up 5% above $67 a barrel as the market had expected OPEC+ to release more barrels.
OPEC+ had cut output by a record 9.7 million bpd last year as demand collapsed due to the pandemic. As of March, it is still withholding about 7 million bpd, or 7% of world demand. The voluntary Saudi cut brings the total to about 8 million bpd.
Under Thursday's deal, Russia was allowed to raise output by 130,000 bpd in April and Kazakhstan by another 20,000 bpd to meet domestic needs.
"Everybody (else) is going to maintain the freeze," Saudi Energy Minister Prince Abdulaziz bin Salman told a news conference to outline the deal.
He said Saudi Arabia would decide in the next few months when to gradually phase out its 1 million bpd voluntary cut "at our time, at our convenience".
"We are not in a hurry to bring it forward," he said.
The Saudi minister and Russian Deputy Prime Minister Alexander Novak, lynchpins in the OPEC+ group, had earlier told OPEC+ ministers the recovery in demand was fragile.
Novak said after the meeting that OPEC+ had to tread cautiously to avoid overheating the market
Russia has been insisting on raising output to avoid prices spiking any further and lending support to shale oil output from the United States, which is not part of OPEC+.
