Russia discusses three-month extension of OPEC + oil production cuts

Top executives of Russia’s oil companies discussed the future of the OPEC + deal with Russian Energy Minister Alexander Novak on Monday, including an option to extend the cuts, which is for three months until March 2021, cuts from January. According to the plan instead of reducing. Sources aware of the case told Russian news agency Interfax.

The OPEC + group, of which Russia is the leader of non-OPEC producers, currently plans to taper the 7.7 million-bpd collective cut by 2 million bpd starting in January 2021. But a second coronovirus wave in the United States and Europe – and already signaling a return to lockdown in major European economies – is further delaying the recovery of global oil demand. In recent weeks, concerns about demand and increased supply from Libya have stressed oil prices and rejected market speculation that the OPEC + group would have to roll over current cuts and reduce those cuts in January There may not be an option to delay planning.

Russian oil firms have openly criticized the OPEC + deal several times, as they argue, it cuts them production with the aim of supporting oil prices, which in turn allows American producers to pump more oil Helps in

Interfax sources said the companies discussed several options in a meeting with Minister Novak on Monday. Russian companies supported the baseline option discussed at the meeting – taking into account the terms of the OPEC + deal, as they are now doing, meaning the group relaxed the cut from 2 million bpd from January 2021, Sources in Interfax said.

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Russian oil firms are against the view recently circulated by some partners in the deal that OPEC + should deepen existing cuts in the first quarter next year. Russia’s oil companies are not ready and willing to deepen the cuts; The maximum they can agree to cut current production through the first quarter of 2021, a source told Interfax.

However, Russia’s oil companies may not have final say in Moscow’s options in the OPEC + deal, as the ideas discussed today will also be discussed at a higher level. Russian President Vladimir Putin will likely have the final say.

By Charles Kennedy for

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