As demand grows, Russia, allies back Opec pledge to boost oil output

Russia on Saturday joined partner countries in backing an Opec-led pledge to boost oil production in response to growing global demand, Angolan Oil Minister Diamantino Azevedo said.

"We have agreed," Azevedo told reporters after a meeting with Opec ministers and 10 non-Opec partner countries in Vienna.

The green light was widely expected after energy ministers from the Organisation of Petroleum Exporting Countries already agreed on Friday to raise output by one million barrels a day.

The proposal is the result of a face-saving compromise hammered out after days of tense talks in Vienna dominated by Iran's resistance to easing an 18-month-old supply-cut deal that has lifted oil prices to multi-year highs.

Saudi Arabia, supported by Russia, was strongly in favour of pumping more oil to ease fears of a supply crunch and quiet grumbles about the higher prices in major consumer countries like the United States, China and India.

But Iran, bracing for the impact of fresh US sanctions on its oil exports, fiercely objected to raising output targets, as did countries like crisis-hit Venezuela and Iraq who are unable to raise output in the near term.

In the end, a vaguely-worded statement that made no mention of the one-million figure allowed all sides to save face.

Ministers also acknowledged that production problems in several countries meant the real number of extra barrels coming to the market would be several hundred thousand less.

Markets were disappointed with the modest output hike, sending crude prices soaring yesterday.

Brent crude added $2.50 to finish at $75.55 a barrel, while the US benchmark West Texas Intermediate gained $3.04 at $68.58 per barrel.


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