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Russia’s Energy Minister Alexander Novak said the decision on whether the crude oil production cut agreement with OPEC needs to be extended beyond its June 30 expiration date will be made in April or May.
“I think that it is still early to speak about it,” Novak said, as quoted by TASS.
A month before that, in March, Novak plans to meet with his Saudi counterpart, Khalid al-Falih, at an energy conference in Texas.
Meanwhile, Russia will be expanding its crude oil exports over the first half of the year, with Novak saying that cutting production was the critical task, not cutting exports. So, this month, the country is set to ship abroad 2.3 million barrels of crude per day, up 6 percent on January 2017 and on February 2016.
Russia agreed with OPEC to cut its daily crude output by 300,000 barrels over the first half of the year. Of this, 110,000 bpd was cut in January and more reductions will come in spring when refineries enter maintenance season.
Last week, the International Energy Agency said OPEC had achieved a compliance rate of about 90 percent on the cut agreement, yet doubts remained as to the prospects of all members of the cartel continuing to comply.
Related: OPEC Reports First Output Deal Results: 890,000 Bpd Cut
According to data from S&P Platts, Saudi Arabia is the top performer, having cut its output faster than other OPEC members, with the cut as of end-January standing at 440,000 bpd. Today’s monthly OPEC report showed that Saudi Arabia cut 496,200 barrels per day, compared to the agreed upon cut of 486,000 barrels per day.
Top energy analyst Daniel Yergin commented, speaking to CNBC, that OPEC members’ dependence on oil revenues and the budget deficits brought about by the price crash will motivate them to stick to their quotas – this seems to be the only way they could hope to improve prices.
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.