When they come to make the drama-documentary series about energy in the 21st century, one of the pivotal episodes should be based on cross-cutting between events in Vienna and in Katowice this week. In the Austrian capital ministers from Opec members and their allies in what is often called the Opec+ group, including Russia and Kazakhstan, met to thrash out an agreement on how to maximize their revenues from the most-used fossil fuel, oil.
In the Polish city, meanwhile, officials from about 195 countries, including the nations represented in Vienna, have been meeting to debate how the world should respond to the threat of catastrophic climate change created by the use of oil, coal and gas.
After 48 hours of sometimes fractious negotiations, the ministers from Opec and their non-Opec allies agreed to cut production by 1.2m barrels a day, effective from January, for six months. In a sign of the careful handling needed to deliver the deal, the precise breakdown of the 1.2m barrels a day between countries was not revealed, although it was specified in the official communiqué that the cartel’s members would cut by 800,000 b/d and the non-Opec countries by 400,000 b/d. Iran, Venezuela and Libya were exempted from having to make reductions. The joint ministerial monitoring committee of the Opec+ group has been given the job of overseeing “the fair implementation” of the resolution, reporting back at their next meeting in Vienna in April.
Tofol Al-Nasr from Opec’s secretariat hinted at some of the uncertainty in the negotiations when she opened the press conference to announce the deal, congratulating the ministers on “reaching this historic agreement”. The oil market reflected relief that there was a deal, but the response was muted: Brent crude and the US benchmark WTI first jumped as news of the production cut emerged, but then fell back and ended up rising only about 2 per cent and 1 per cent respectively for the day.