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Russia sees no reason to join OPEC, but the need to continue the OPEC/non-OPEC cooperation in some form after the production cuts end is obvious, Russia’s first deputy minister of energy Aleksey Texler said at the CERAWeek conference in Houston.
“At present it is clear that the kind of cooperation that we’re having will continue even if a slightly different format,” Texler said via a translator at CERAWeek by IHS Markit, as carried by Platts.
“The need to work together is obvious,” the Russian deputy energy minister said, noting that the ongoing OPEC/non-OPEC production cut deal has created a “new kind of family” on the global oil markets.
According to Texler, OPEC and Russia will continue to keep cooperating in the future, but there is no need to “cement something or cut something in stone”.
Texler’s comments come in the wake of increased calls to institutionalize the current OPEC-Russia deal into creating a kind of a ‘super group’ of oil producing countries that would monitor and potentially intervene on the oil market, even after the current agreement to withhold a total of 1.8 million bpd of supply expires at the end of this year.
The Russian deputy energy minister’s words also come at a time in which surging U.S. production is threatening to undo a large part of the cuts and eat into OPEC and Russia’s market shares even more.
Soaring U.S. production is a “risk” to the Russian companies’ plans to keep their market share, Texler said.
Earlier this week, the International Energy Agency (IEA) released its annual oil report that painted a bleak picture for OPEC in the short to medium term. According to the IEA, the U.S. will supply 80 percent of the world’s demand growth over the next three years, with Canada, Brazil, and Norway covering the remainder, leaving no room for more OPEC supply.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.