It’s too early to say if OPEC and its Russia-led non-OPEC allies will extend next week their pact to cut oil production through the end of the year, Russia’s Energy Minister Alexander Novak said on Monday, once again leaving the market guessing if Russia is willing to continue cutting its oil production.
According to Khalid al-Falih, the energy minister of OPEC’s largest producer and de facto leader, Saudi Arabia, the cartel is close to reaching an agreement to extend the production cut deal beyond its current expiry date at the end of June.
Yet, the big unknown is the leader of the non-OPEC group of producers, Russia, which has yet to express its position and which has always kept the oil market guessing if it will play ball in every discussion of the pact since OPEC and its allies began to manage their oil producing policies at the beginning of 2017.
Last week, OPEC rescheduled its meeting from the end of June to July 1-2, reportedly because Russia had requested that the meeting be held after the G20 summit on June 28-29 in Japan.
According to Novak’s comments from today, Russia’s energy ministry is discussing with the Russian oil companies how to proceed with the deal and it’s too early to say if the production cuts will be rolled over into the second half of the year. Related: Oil Shoots Up As Iran Says ‘’It’s Ready For War’’
“We need to wait for, among other things, the G20 heads of state meeting,” Reuters quoted Novak as saying on the sidelines of an energy forum in St Petersburg, Russia.
“Let’s see what questions they discuss there, how the economy develops, the situation on the market,” the Russian minister said.
While Russia has not yet clearly stated how it would proceed with the production cuts, OPEC’s oil producers from the Persian Gulf are reportedly not in a rush to increase production in July despite the fact that the current agreement expires at the end of June and the cartel and allies will discuss their future oil policy in the first days of July. The Gulf oil producers—Saudi Arabia, Kuwait, and the United Arab Emirates (UAE)—will keep their July production within the limits set by the current deal expiring in June, OPEC sources told Reuters last week.
By Tsvetana Paraskova for Oilprice.com
More Top Reads From Oilprice.com:
- Hedge Funds Halt Selloff In Oil As Mid-East Tensions Spike
- The West Just Made A Big Mistake In Middle East
- Venezuela’s Oil Production Set For Another Drop