FILE - Candles, lit by activists, protesting the killing of Saudi journalist Jamal Khashoggi, are placed outside Saudi Arabia's consulate, in Istanbul, during a candlelight vigil, October 25, 2018.
Russian Federation gave a commitment to reduce output by 228,000 bpd from October levels of 11.4 million bpd, though it said the cuts would be gradual and take place over several months.
The Hook meeting, just 24 hours before OPEC was scheduled to meet, threatened to scuttle an agreement, said Helima Croft, commodities strategist at RBC Capital Markets LLC and a former Central Intelligence Agency analyst.
Libya and Nigeria were exempt from earlier cuts, while Iran asks not to participate in any deal that would reduce its oil output. The US government announced a re-imposition of sanctions on Iran, which would have led to a cut in Iranian oil exports. The meeting lasted for two days agreed to cut 12 lakh barrels per day (MBD) between OPEC countries.
A day later, at OPEC headquarters, heated words were exchanged between Bijan Zanganeh, Iran's oil minister, and Al-Falih, according to people familiar with what happened. U.S. crude prices spiked almost 5% to $54 a barrel on the news.
The highly anticipated decision was delayed since Thursday pending the outcome of the dialogue between both groups on the ideal volume that would be adequate to help stabilise the market and strengthen crude oil price at the global oil market.
The Trump administration has supported that transition by opening new public land to drilling and loosening restrictions on public and private oil and gas production, with "energy independence" as a frequent talking point.
The Organization of the Petroleum Exporting Countries (OPEC) is among the world's most powerful cartels. Between late October and late November, Brent crude fell by nearly 30 percent, from about $80 a barrel to less than $60, where it remains. After the entry into force of the restrictions on OPEC countries will account for 800 thousand barrels, while the remaining 400 barrels will be produced for countries that are not included in the cartel.
"Low prices are actually not good for the US economy, " Al-Falih said, a riposte to Trump's repeated calls for OPEC to open the taps.
A total of 1.2 million barrels of oil a day are set to be removed from the market.
However, the USA then granted temporary waivers to eight countries, including crucially China, to allow them to carry on importing Iranian oil, contributing to a plunge in oil prices which wiped out the gains seen since early 2017.
A further breakdown shows Saudi Arabia will reduce its production down to about 10.7 million bpd in December and to 10.2 million bpd in January.
"That compares to our forecast for oil demand to increase by just 1.1 million b/d in 2019, leaving little room for a significant increase in OPEC production next year and making a production cut necessary to stabilise prices".
This week, USA senators are due to take aim at the Saudi-led coalition fighting in Yemen and will hold an unprecedented vote on ending US support for the war.