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Saudi Arabia’s Energy Minister Abdulaziz bin Salman met today in Riyadh with Russia’s Deputy Prime Minister and top OPEC+ negotiator Alexander Novak to discuss further cooperation between the two countries ahead of next week’s monthly OPEC+ meeting.
According to a tweet by the Saudi Energy Ministry, “The meeting discussed the latest developments in the work of the Saudi-Russian joint committee, and discussed opportunities for cooperation between the two countries within its framework.
The next OPEC+ meeting, scheduled for August 3, should see the end of the record production cuts that the extended cartel agreed in 2020 amid the demand destruction wrought on the oil industry by pandemic lockdowns around the world.
At the time, the group agreed to remove a combined 9.7 million barrels daily from global oil supply. Since then, OPEC+ has been gradually reversing the cuts but underperforming, prompting worry that not all of its members are capable of increasing their output in line with demand growth.
According to unnamed sources cited by Reuters, OPEC+ might consider keeping its production rate unchanged in September, although there will also be discussions of a moderate increase in output.
“OPEC production is constrained, though supplies are stabilizing in Libya and Ecuador. Under-investment in many member countries will keep production constrained,” ANZ Research said ahead of the meeting.
Analysts from Energy Intelligence also said a substantial hike in oil production from the OPEC+ group was unlikely to follow next week’s meeting, noting the spare capacity constraints of its members.
Only two OPEC members have considerable spare capacity—Saudi Arabia and the UAE—and both have indicated they are unwilling to tap it in response to calls from Europe and the U.S. to boost production in order to make up for lost Russian barrels as a result of Western sanctions.
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.