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De facto OPEC leader Saudi Arabia plans to reach a consensus on the future of the bloc’s production limits prior to the deal’s one-year anniversary in November, according to comments by Saudi Foreign Minister Khalid al-Falih on Friday.
“I am looking forward to reaching a consensus, working with you in the next few weeks before we have the Nov. 30 meeting,” Falih said to Alexander Novak, his Russian counterpart.
Russian President Vladimir Putin – a key non-OPEC country that synchronized an output reduction with the bloc’s plans – said Moscow could sanction lower production through the end of next year, if need be. So far, the deal is due to last until March 2018.
“As satisfied as we are with the progress made, I think you agree that our job is not done and there are still uncertainties and headwinds on global oil markets,” Falih continued, in a conversation with Novak at a press conference. “We have to keep our eyes clearly on the road and our hands on the wheel.”
Saudi King Salman is on a state trip to Russia this week in a bid to cement an economic relationship with the former rival. The visit to Moscow is a first in Saudi history and follows a slew of deals between Russian oil and gas majors and Riyadh’s prized fossil fuel company, Saudi Aramco.
“Relations between Russia and Saudi Arabia have been stably improving,” he said. “(They) clearly went to a quite new level after the visit by the King.”
An extended production reduction agreement would allow prices to rise as the KSA prepares an initial public offering for Aramco in 2018. The sale would offer five percent of the state-owned company’s assets to private investors in the largest financial event of its kind in modern history.
By Zainab Calcuttawala for Oilprice.com
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Zainab Calcuttawala is an American journalist based in Morocco. She completed her undergraduate coursework at the University of Texas at Austin (Hook’em) and reports on…