Moscow, Riyadh will ask Opec to boost output by 1.5m bpd

MOSCOW: Russia and Saudi Arabia will ask Opec to increase production by 1.5 million barrels a day in the third quarter of 2018, Russian Energy Minister Alexander Novak said on Saturday.

Opec and Russia decided together in 2016 to cut their supply in order to push prices up following a crash induced by a global crude production glut.

An oil production shortfall in Iran and Venezuela has changed the scenario for the two countries and members of the Organisation of the Petroleum Exporting Countries.

Novak said Moscow and Riyadh “propose increasing production in the third quarter by 1.5 (million bpd),” according to RIA Novosti news agency.

“We are only proposing this for the third quarter. In September we will review the situation in the market and decide the future course.”

Russian President Vladimir Putin and Novak met Saudi Crown Prince Mohammed Salman before the opening World Cup match in Moscow.

Since 2017, an Opec agreement on production cuts has allowed oil prices to rise but there are fears that renewed American sanctions on Iran and a fall in output in crisishit Venezuela could disrupt supply.

On Friday, oil prices fell more than US$2 (RM8) a barrel after two of the world’s biggest producers indicated they might increase output at this week’s Opec meeting, while US exports were threatened by potential Chinese tariffs on crude oil and refined products.

Oil investors have been nervous ahead of the coming Opec summit in Vienna.

Brent crude oil fell US$2.50, or 3.29% to settle at US$73.44 a barrel. US crude settled US$1.83 lower at US$65.06 a barrel. In postsettlement trading, US crude retreated further, falling US$2.25, or 3.4%, to US$64.64 a barrel.

Brent crude was on track to end the week down more than 4%, while US crude was heading to fall 1.7%.

After settlement, China announced US$50 billion in retaliatory tariffs, in response to a series of levies by US President Donald Trump earlier.

Some investors were surprised when crude oil and other energy products were included for tariffs at a later date, the official Xinhua news agency reported, citing the Tariff Commission of the State Council. – AFP, Reuters