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A senior Russian official has suggested Russia will press for an end of the OPEC+ production cuts after the end of June when the original agreement expires, Reuters reports.
Kiril Dmitriev, head of the country’s direct investment fund, has been a staunch supporter of the OPEC+ cooperation since the beginning, which makes his latest remarks all the more significant.
“It is quite possible that given the improving market situation and falling stocks, (OPEC and its allies) could decide in June this year to abandon supply cuts and subsequently increase output,” Reuters quoted Dmitriev as saying.
“This decision will not mean the end of the deal but a confirmation that participants continue their coordinating efforts when it is important not only to cut but to increase output depending on market conditions,” the official added in keeping with his original stance on the partnership between the cartel and Russia.
Meanwhile, Saudi Arabia’s Energy Minister also had comments to make about the agreement: Khalid al-Falih told media it was too early to say whether the agreement would be extended beyond the end of June, adding that next month would be crucial for where OPEC+ would go in the second half of the year.
“JMMC will be a key decision point because we will certainly by then know where the consensus view is and, more importantly, before we ask for consensus, we will know where the fundamentals are pointing,” he said.
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The joint ministerial monitoring committee of OPEC+ is meeting in May.
Russia’s oil companies have been reluctant to take part in the production cuts this time around. In fact, there were reports earlier this year that Rosneft and other state entities were pushing for an end of Russia’s participation in the pact so they could start ramping up production again.
Saudi Arabia, on the other hand, is trying to convince the rest of OPEC and its partners to keep pumping at the reduced rate until Brent goes above US$70 a barrel for a more extended period of time than a day.
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.