Joining Azerbaijan, Kazakhstan Agrees to Curtail Oil Output

Kazakhstan will reduce oil production by 20,000 barrels per day (bpd) starting January 1, 2017. According to Energy Minister Kanat Bozumbayev, oil output will be cut at oil fields in Aktobe, Kyzylorda and Mangystau. The decision was made following the meeting of the Organization of the Petroleum Exporting Countries (OPEC) in Vienna, Austria, on December 10, 2016. 

The need for joint cooperation to cut oil prices was recognized at the OPEC meeting after considering the current conditions of oil markets as well as short-to-medium term prospects. The goal of the decreased production is to achieve a lasting stability in the oil market in the interest of oil producers and consumers.

In addition to Kazakhstan, other non-OPEC countries (such as Azerbaijan, Kingdom of Bahrain, and the Russian Federation) agreed to reduce output by 558,000 bpd for six months starting January 1, 2017. The agreement will be extendable for another six months, taking into account prevailing market conditions and prospects.

Of note, OPEC Member Countries agreed to implement a production adjustment of 1.2 million barrels a day (mb/d), also effective January 1, 2017.