Russian Energy Minister Alexander Novak is still keeping his cards close to his chest, with the ministry reporting that he discussed with his Venezuelan counterpart, Eulogio del Pino, “coordinating action” to rebalance oil markets.
Del Pino visited Moscow earlier today, also meeting with Rosneft’s chief Igor Sechin, as part of efforts to help negotiations among OPEC members head in the right direction from Venezuela’s perspective. The South American country is perhaps the hardest-hit by the oil price crisis, with its economy in shambles and close to defaulting on its debt.
According to Del Pino, his country proposed during this meeting that non-OPEC countries take 400,000 to 500,000 barrels per day out of the market—a lofty goal indeed given the small amount of cuts OPEC was suggesting they themselves would take offline.
Russia’s energy top cat has made several noncommittal remarks regarding production levels this past week during his meetings with other senior oil officials, including Saudi Arabia’s Oil Minister Khalid al-Falih and OPEC’s secretary-general Mohammed Barkindo.
After the Novak-al-Falih meeting, both ministers offered up vague comments, reiterating that efforts were underway to restore oil’s fundamentals to a more favorable level, but did not speak about any specifics. Novak, moreover, has said earlier that although Russia is all in for a production freeze agreement in principle, it was waiting until OPEC’s members reached an agreement on the matter themselves.
Yesterday, Novak met with Mohammed Barkindo, with media quotes of the minister saying that a coordinated course of action by OPEC and non-OPEC producers was essential, and that this action should be taken as quickly as possible, since there was a very real danger of the supply/demand discrepancy worsening as winter draws nigh.
Novak added that he and OPEC’s secretary-general had indeed discussed specific steps that could be taken to achieve these ends, adding, however, that he would not like to go into any more detail about these.
Venezuela’s government, for its part, is doing its best to gain support for a freeze. This weekend, President Nicolas Maduro was in Iran, meeting with President Hassan Rouhani and the Supreme Leader of Iran, ayatollah Ali Khamenei, getting Rouhani’s total support for “any measure” aimed at restoring the market balance, but without a clear declaration that Iran would partake in these measures.
By Irina Slav for Oilprice.com
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Irina is a writer for the U.S.-based Divergente LLC consulting firm with over a decade of experience writing on the oil and gas industry.