OPEC announced plans to reduce oil production for the first time since 2008

The OPEC countries at the talks in Algeria on Wednesday agreed for the first time since 2008 to reduce the level of oil production, reports Reuters, citing a statement by the Minister of oil of Iran Bijan Zanganeh.

“OPEC made today an exceptional decision <…> after two and a half years the group has reached consensus on the issue of management of the market”, — quotes Agency of his word.

According to Zanganeh, as well as other oil Ministers of the OPEC countries, the level of oil production of the countries-participants of the cartel will be reduced to 32.5-33 million barrels per day. According to estimates by OPEC, current oil production is of 33.24 million barrels per day.

“We decided to reduce production by about 700 thousand barrels per day,” said Zanganeh.

The volume of production for each country in the cartel will be determined to the next formal meeting of OPEC to be held in November. Also OPEC members intend to appeal to the countries outside of OPEC, to join the agreements to reduce the level of oil production.

Amid reports about the progress made in the negotiations in Algiers agreements, oil jumped in price by almost 6%.

Saudi Arabia is the largest oil producer of OPEC: it produces more than 10.7 million barrels per day. Sources in the cartel told the Agency that Saudi Arabia had offered to cut production to approximately 10.2 million barrels per day if Iran agrees to freeze production at current levels — about 3.6—3.7 million barrels per day. Earlier, Tehran declared that wants to increase production to more than 4 million barrels a day.