ORAN, Algeria – Saudi Arabia, OPEC's de-facto leader, said Wednesday the oil group will slash production by 2 million barrels a day at the beginning of next year — its largest single reduction ever.
Russia and other non-OPEC countries said they would join in the effort by removing hundreds of thousands more barrels from the market.
An official decision to cut 2 million barrels from output all at once would be a first for the organization. OPEC had cut that amount from its output four years ago, but that was done in two stages.
Asked Wednesday if he stood by that figure, Naimi told reporters "that's the correct number." Later, he said the cut would take effect Jan.1, pending formal approval by the ministers.
Also significant would be formal support from Russia, Azerbaijan and other non-OPEC producers. Mexico, Norway and Russia slashed production in the late 1990s, at a time oil was selling for about $10 a barrel.
Iraqi Oil Minister Hussain al-Shahristani said he supported the oil supply cut of at least two million barrels per day at the group's Wednesday meeting in Algeria.
OPEC gave ministers ammunition to justify cuts in its latest monthly market report, released Tuesday. The bloc predicted demand for its crude oil will have fallen by 700,000 barrels per day this year, and will drop by at least twice that amount in 2009 as the worsening global economy "is expected to have a strong impact on oil demand."
Ahead of a formal decision, other OPEC ministers also expressed sentiment for a large cut to shock the market and put a floor under prices.
Shokri Ghanem, Libya's delegate to OPEC, said that "we should make a substantial cut" and that 2 million barrels was "a very good number."
Iranian Petroleum Minister Gholamhossein Nozari did not give a number, but said that Iran would support a reduction of 2 million barrels per day.
Still, while eager to push prices higher, OPEC must weigh production cuts against the risk of driving the economies of its top customers deeper into recession.
A senior OPEC official, who spoke on condition of anonymity because he was not authorized to comment publicly, said "reasonable" OPEC nations would accept prices around $50 a barrel in the short term so as not to contribute to the world economic downturn.
Russian media quote Deputy Premier Igor Sechin as saying Moscow is ready to take 300,000 barrels off the market. And the oil minister of Azerbaijan tells The Associated Press that his country is willing to cut back by the same amount.
The International Energy Agency recently forecast that global demand for oil would fall this year, the first decline since 1983.
Oil's collapse by more than $100 a barrel has made July's all-time high above $147 seem a distant memory but many analysts now expect a rebound and say crude's bear market may prove to have been exceptionally brief.
Oil prices could already have hit rock-bottom for 2008 when they touched lows near $40 a barrel this month, and are poised to climb despite the dire outlook for the global economy.
Merrill Lynch shocked investors earlier this month by saying that oil prices could fall as low as $25 a barrel next year.
The Associated Press and Reuters contributed to this report.