The OPEC, or Organization of the Petroleum Exporting Countries, agreed to reduce the oil production at the last OPEC meeting on Nov. 30th, 2016.
It means that the oil price will be raised by the contract of oil producing nations. The members plan to cut production by about 1.2 million barrels per day, equal to 3.5 percent of current production.
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So far, the oil price is rapidly falling since 2014. The current price is a half of that in two years ago. One reason is decreased buying the power of China. In addition, Iran has been willing to increase the production after the relationship with the US was restored.
Saudi Arabia, one of the main oil producers, is eager to control the price. In contrast, Iran and Iraq, which is involved in the conflict against anti-governmental organizations, hesitate to reduce the oil production. Because of the imbalance of each nation’s view, controlling the oil price had been difficult.
However, they agreed to the planned reduction at last. Vladimir Putin seems to have taken a crucial role in committing the deal among OPEC members. He met Saudi Prince Mohammed bin Salman in this September. He admitted the influence of Putin on this negotiation, Ayatollah Ali Khamenei, the supreme leader of Iran as well.
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I think stabilized oil price will work beneficially to the world in total. In recent years, Putin often takes the leadership instead of the US. Considering that President-elect Donald Trump has no intention to become the manager of the world, Putin’s presence will grow much more.