OPEC and non-OPEC member countries met on Wednesday on the sidelines of the World Energy Congress in Turkey to discuss a plan to limit daily oil production. Oil prices have dropped more than 50 percent over the last two years amid a global economic slowdown. A deal, if approved, would aim to stabilize the market. CCTV's Natalie Carney has more from Istanbul.
The OPEC announcement to curb oil production was a sharp turn from a two-year-old policy of pumping without limits, which succeeded in hurting rival suppliers but also sent prices into free fall.
Russia was the first non-OPEC member to welcome the deal, agreeing to also limit its average daily production of just under 11 million barrels. Brent crude surged to one-year highs on the news. This is a welcome move for oil producing nations, which have struggled under low oil prices.
Christoph Frei, Secretary General of World Energy Council said, "We have seen too low oil prices destroy demand from countries which suffer deeply from the loss of revenue, and that, in itself, slows down global growth. If you look at the IMF outlook, the outlook is clearly not as good as it was before."
According to recent reports from both the Organization for Economic Cooperation and Development and the IMF, global growth in 2015 was the weakest since the end of the economic crisis in 2008. And the forecasts for next year are not promising.
Yet, OPEC member Saudi Arabia warned against drastic production cuts that could shock markets.
China, which produces around four and a half million barrels of oil per day, is also concerned about what sudden changes could mean to the global economy.
Han Wenke, Director General of Energy Research Institute China, said, "China is also facing problems as the oil prices drop, but at the same time, China doesn't want oil prices to rise too fast, as it could have some negative impacts on the global economic recovery."
While many oil consumers have been enjoying cost savings, such as Turkey, which import roughly three quarters of its energy needs, a drastic rise in prices could be a jolt.
There have also been differences within OPEC over this deal. Iran and Iraq refused to attend informal talks among OPEC members, here in Istanbul, saying they're instead looking to make up for lost revenue.
Iran wants to increase their oil production to four million barrels per day before considering limits, while Iraq disagrees with the methods OPEC is using to calculate each member's production quotas.
OPEC members Nigeria and Libya have been exempt from the production caps, in the face of security issues which have affected their ability to reach "normal" production quotas.
This is raising concerns about the ability of the deal to truly rebalance oil prices.
Richard Morningstar, Founding Director of Global Energy Center, Atlantic Council, said, "We really don't yet know what is going to happen. Will there be a real freeze Will there be a cut in production Who is ultimately going to agree Given the global demand situation now, how much difference will it make if 500,000 to a million barrels come off the market Right now, I'm not sure."
OPEC hopes to hammer out all the details needed by the next official meeting in Vienna at the end of next month.
