Opec and its allies have agreed to cut an extra 500,000 barrels of oil a day from the global market next year to help prop up prices amid fears of an economic slowdown.

The alliance decided at a meeting in Vienna to deepen its production cuts after reining in output for three years to prevent an oversupply of crude from dragging down prices.

The 14-member cartel and its allies havewill toughen their target next year from a cut of 1.2m barrels a day below the group’s production rate in October 2018, to 1.7m.

The pact spurred a rapid rise in the price of oil from lows of $62.80 a barrel in the early afternoon on Friday to more than $64.50 a little over an hour later. The price is well above the lows of $50.57 a barrel last December, but below the highs of $74.94 a barrel in April this year.

Founded in 1960, the cartel of the world’s biggest oil producers emerged as a political and economic force with the 1973-74 US oil embargo, which caused oil prices to spike. The club consists of 13 countries, with Saudi Arabia the biggest producer, followed by Iraq and Iran.

In response to the 2014-16 oil price slump, Opec partnered with Russia in December 2016 to agree a cut in production of 1.8m barrels a day. That curb, the first of its kind in 15 years, drove up the price of oil. In May 2017, the cuts were extended until the end of March 2018.

Opec‘s official members are: Algeria, Angola, Ecuador, Equatorial Guinea, Gabon, Iran, Iraq, Kuwait, Libya, Nigeria, Republic of the Congo, Saudi Arabia, the United Arab Emirates and Venezuela. Indonesia and Qatar’s membership has lapsed.

The Opec+ group, sometimes known as ‘Vienna Group’, adds 10 non-member nations, including Russia, Mexico and Kazakhstan. Between them these nations supply 55 percent of oil production and hold 90 percent of the planet’s oil reserves.

Opec members are expected to bear the brunt of the cut, by reducing production by 340,000 barrels a day, while its allies – led by Russia – will make up the balance.

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A flood of new oil production is expected next year, far outpacing the sluggish growth in demand.

Opec has been cutting output since oil prices plummeted to 13-year lows in early 2016. Manuel Salvador Quevedo Fernández, the president of Opec and Venezuela’s oil minister, said the market was in a “perilous condition” in 2016 and remained at risk.

“We have been on a long and eventful journey since those dark days,” he said. “However, we continue to face various challenges and critical uncertainties that are beyond the capacity of any one stakeholder to influence. There have been trade-related issues, geopolitics and disruptions to security of supply.”

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Saudi Arabia is expected to shoulder the bulk of the responsibility for reining in Opec oil output, but the Saudi energy minister, Prince Abdulaziz bin Salman, urged Opec’s members and allies to exercise stricter compliance with .

The Saudi prince told delegates in Vienna that the oil cartel is “like a religion”. He said: “If you are a believer you have to practice. Without practice you are an unbeliever. I do not assume that anyone here in this room is an unbeliever, but I would reiterate to our friends that further commitment and further conformity would allow us all the benefit.”

He added: “The market will have to trust us.”



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