OPEC waits on Russia for oil output reduction
OPEC has tentatively agreed an oil output cut but was waiting to hear from non-OPEC heavyweight Russia before deciding the exact volume.
Russian Energy Minister Alexander Novak flew home from Vienna earlier for talks with President Vladimir Putin in St Petersburg. He returns to the Austrian capital today for further discussions.
“We hope to conclude something by the end of the day tomorrow ... We have to get the non-OPEC countries on board,” Saudi Energy Minister Khalid al-Falih told reporters before the OPEC meeting started yesterday.
The price of crude has fallen almost a third since October but US President Donald Trump has demanded the Organization of the Petroleum Exporting Countries make oil even cheaper by refraining from output cuts. Possible output cuts by OPEC and its allies ranged from 0.5-1.5 million bpd.
OPEC delegates have said the group and its allies could cut by 1 million bpd if Russia contributed 150,000 bpd of that reduction. If Russia contributed around 250,000 bpd, the overall cut could exceed 1.3 million bpd.
Novak said Russia would find it harder to cut oil output in winter than other producers because of the cold.
Oil prices have crashed as Saudi Arabia, Russia and the United Arab Emirates raised output since June after Trump called for higher production to offset lower exports from Iran, OPEC’s thirdlargest producer.
The US is not part of any output-limiting initiative due to its anti-trust legislation and fragmented oil industry.
Iranian exports have plummeted after the United States imposed fresh sanctions on Tehran in November. But Washington gave sanction waivers to some buyers of Iranian crude, further raising fears of an oil glut next year.
Iranian Oil Minister Bijan Zanganeh said he would support a cut as long as Iran did not need to reduce its own output.