The members of the Organization of the Petroleum Exporting Countries have vowed to cut a collective 1.2 million barrels a day and are asking other oil producers to reduce output by 600,000 barrels a day.
The long-awaited output limits are expected to make it possible for U.S. producers to ply the expensive, complicated route to Asia from the United States. The stage was set when the United States lifted a 40-year-old ban on exporting American crude last December. Since then, much of the oil has gone to Europe, but now industry heavyweights are attempting to extend those exports to Asia, a region whose oil consumption is growing.
"It is still in testing the phase. The export ban was lifted last last year, and since then, we're seeing this evolution of the U.S. export industry, as there's this period of exploration to figure out how best to get these exports out, how to make this work economically," said Matt Smith, director of commodity research at tanker-tracking firm Clipper Data.