Despite the break-up of the OPEC+ production cut agreement, “the doors aren’t closed” to future cooperation between Russia and OPEC, Russia’s Energy Minister Alexander Novak told local news channel Rossiya 24 on Tuesday.
“The fact that the agreement was not extended beyond April 1 doesn’t mean that we cannot cooperate with OPEC and non-OPEC producers in the future. We signed a charter last year and we will continue cooperation as part of it,” Novak told the news channel.
”We have various instruments, including production cuts and production increases, should they be necessary,” Novak said, adding that new agreements could be reached.
Novak’s comments came a few days after Russia called it quits with the current production deal as OPEC and its leader Saudi Arabia insisted on a massive additional 1.5 million bpd production reduction until the end of 2020 in response to the depressed oil demand amid the coronavirus outbreak. Russia, for its part, was proposing to extend the cuts as-is into Q2 and see where oil demand and the oil market would be in June before making new decisions about production restrictions.
Russian firms have long balked at the OPEC+ deal which, they said, was only hampering their production expansion plans while helping U.S. shale to boost production to record highs.
After the OPEC+ break-up last Friday, Saudi Arabia launched an all-out oil price war at Russia and its markets, by significantly cutting its official selling prices (OSPs) to all markets and announcing it would boost production as of April.
Following the Saudi-Russia standoff, oil prices plunged on Monday in the worst one-day slump since 1991, before recovering some losses rising by 6 percent on Tuesday as markets began to recover from the rout and oil market participants looked to potential economic stimulus in various countries to counter the economic slowdown amid the coronavirus outbreak.
By Tsvetana Paraskova for Oilprice.com
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