Russia backs OPEC oil output hike to meet growing demand

VIENNA: Russia joined an Organisation of Petroleum Exporting Countries (OPEC)-led pledge to boost oil production in response to growing global demand, capping a week of tense diplomacy for the grouping that averted a damaging rift between arch foes Iran and Saudi Arabia.

Speaking after a meeting in Vienna, Russian Energy Minister Alexander Novak said the agreement would give the OPEC and non-OPEC countries cooperating in a landmark supply-cut pact the necessary ‘flexibility’ to prevent the market overheating.

The non-cartel countries in the so-called OPEC+ alliance were widely expected to give their backing after ministers from the OPEC already agreed on Friday to boost output from July.

“We came to the conclusion that what was needed was about a million barrels of additional production,” Saudi Arabia’s Energy Minister Khalid al-Falih told a press conference.

The proposal is the result of a compromise hammered out in days of fractious talks in Vienna dominated by Iran’s resistance to easing an 18-month-old supply-cut deal credited with lifting oil prices to multi-year highs. Saudi Arabia, supported by Russia, was strongly in favour of pumping more oil to allay fears of a supply crunch and ease concerns about the high prices in major consumer countries like the United States, China and India.

But Iran, bracing for the impact of fresh US sanctions on its oil exports, fiercely objected to raising output targets, as did countries like crisis-hit Venezuela and Iraq who are unable to raise output in the near term.

But in the end, a vaguely-worded statement that made no mention of the one-million figure allowed all sides to save face.