Russia and the Organization of Petroleum Exporting Countries are looking at forming a joint organization after the OPEC pact to curb global crude supplies expires at the end of the year. Financial Tribune photo.
OPEC pact cut global crude supply by 1.8 million barrels per day
On Tuesday, Russian Energy Minister Alexander Novak hinted that Russia would be interested in being part of a joint organization involving OPEC and non-cartel countries after the OPEC pact expires at the end of the year.
Last month, Saudi Arabia’s Energy Minister Khalid al-Falih told Reuters that the kingdom and Russia were working to build a long-term agreement that could span 10-20 years. Such an agreement could extend the participants’ controls over global crude supplies from major exporters.
Novak said the current “mechanism of interaction” has proved effective.
“We are now thinking about a format for cooperation which could be for the longer-term, which would include the possibility of market monitoring, information exchange and if needed the implementation of some joint actions,” said Novak.
Under the current OPEC pact, Russia has cut 300,000 barrels per day of production from its October 2016 level of 11.247 million b/d.
“Oil production restriction is not a panacea, this is a necessary measure,” Reuters reports Novak said on Tuesday. Novak added that increased cooperation with OPEC is warranted.
But Novak says Russia is not joining OPEC, despite warming relations between the oil producing superpowers.
Late last year, King Salman visited Moscow and a delegation from Saudi Arabia is expected to attend the Russian economic forum in St. Petersburg in May.
While there are no concrete plans on long-term cooperation yet, new proposals on the proposed cooperation will be discussed at an OPEC ministerial committee meeting. Participants in the session will meet to discuss the supply cut agreement in Jeddah, Saudi Arabia later next month.
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