Russia has rejected a proposal by OPEC to deepen the oil production cuts agreed last December by another 1.5 million bpd, Reuters reported, adding Moscow has only agreed to extend current cuts that total 1.7 million bpd.
Energy Intelligence's deputy bureau chief Amena Bakr tweeted that there is still some hope as Russia was currently discussing the issue with Saudi Arabia, but chances of an agreement seem slim after Reuters quoted a Moscow government source as saying the Russian position was not about to change.
The OPEC proposal of additional cuts of 1.5 million bpd envisaged cuts of 1 million bpd for OPEC and 500,000 bpd for its external partners, led by Russia, meaning Russia would have to cut the most. The total size of the cuts, if agreed, would reach 3.6 million bpd.
If the Russian position indeed does not change, this would put OPEC in an even more precarious situation than it already is. Earlier today UAE's energy minister Suhail al-Mazrouei said he did not expect OPEC to go ahead and cut without Russia, even though his Nigerian counterpart Timipre Sylva admitted the cartel would have to cut even if Russia does not get on board with the additional cuts.
"That's really not going to be very good for us but we expect a deal," Sylva said as quoted by S&P Global Platts.
Iran's energy minister BIjan Zanganeh said OPEC had "no plan B" if Russia rejected the 1.5-million-bpd cut proposal, which some called an ultimatum as the proposal was made before Russian Energy Minister Alexander Novak joined OPEC in Vienna. He also reportedly said, however, that while Russia had not agreed to the proposal it hadn't opposed it explicitly.
Oil was in free fall Friday, with Brent dropping almost 8 percent at $46.16 a barrel and West Texas Intermediate fell 7.8% at $42.33 at 10:20AM ET.
By Irina Slav for Oilprice.com
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Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry. More