Saudis agree to surprise oil output cut with exemption for Iran

Singapore

THE Organization of the Petroleum Exporting Countries (Opec) shocked markets with a deal to cut oil output after kingpin Saudi Arabia allowed bitter rival Iran to be exempted, but analysts warned on Thursday the move would not likely have a lasting impact.

The cartel's announcement of the first reduction in eight years sent crude prices surging up to 6 per cent on Wednesday, while energy firms in the US and Asia followed suit with huge gains.

At the end of six hours of negotiations and weeks of horse trading, Opec announced the plan to cut production to 32.5 million-33 million barrels per day from the 33.47 million in…