According to Bloomberg, it’s the first significant cooperation between OPEC and non-OPEC producers in 15 years and Saudi Arabia said it’s open to further action.
Oil pared gains after the accord was announced, signaling traders see no immediate end to the global supply glut.
The deal to fix production at January levels, which includes Qatar and Venezuela, is the “beginning of a process” that could require “other steps to stabilize and improve the market,” Saudi Oil Minister Ali Al-Naimi said in Doha Tuesday after the talks with Russian Energy Minster Alexander Novak.
Qatar and Venezuela also agreed to participate, he said.
Saudi Arabia has resisted making any cuts in output to boost prices from a 12-year low, arguing that it would simply be losing market share unless its rivals also agreed to reduce supplies.
Naimi’s comments may continue to feed speculation that the world’s biggest oil producers will take action to revive prices.
“The reason we agreed to a potential freeze of production is simply the beginning of a process” over the next few months, Naimi told reporters.
“We don’t want significant gyrations in prices. We don’t want a reduction in supply. We want to meet demand. We want a stable oil price.”
More than a year since the Organization of Petroleum Exporting Countries decided not to cut production, oil remains about 70 percent below its 2014 peak, hovering around $140 a barrel.
Supply still exceeds demand and record global oil stockpiles continue to swell, potentially pushing prices below $20 a barrel before the rout is over, Goldman Sachs Group Inc. said last week.
While Novak has said he could consider cuts if other countries joined in, Russia faces significant obstacles to doing so. The freeze is conditional on other nations agreeing to participate, Russia’s Energy Ministry said in a statement.
The group of producers plans to monitor output and prices for four months, Venezuelan Oil Minister Eulogio Del Pino said in an e-mailed statement.
“This is an announcement of a production freeze among countries whose production didn’t even grow recently,” said Eugen Weinberg, head of commodities research at Commerzbank AG in Frankfurt.
Oil erased gains in London after rising before the meeting amid speculation the countries would discuss production cuts. Brent crude fell 3.6 percent to settle at $32.18 a barrel Tuesday in London, having earlier climbed as much as 6.5 percent.