Opec pushes for deeper crude output cuts, but Russia reluctant
vienna — Saudi Arabia and other Opec members were seeking to win support from Russia on Wednesday to join them in additional oil output cuts in a bid to prop up prices which have tumbled by a fifth this year because of the coronavirus outbreak.
Two Opec sources told Reuters talks were focusing on an additional cut in excess of one bpd on top of existing curbs agreed by Opec and its allies since January. Russia has been resisting the extra measure.
“Opec hopes for a cut bigger than one million but the challenge is still Russia,” another Opec source said.
A panel of several representatives from Opec states, Russia and other producers recommended on Tuesday cutting output by 600,000 to one million bpd only in the second quarter and said existing cuts of 2.1 million bpd by the group known as Opec+ should be extended to the end of 2020.
Russia has indicated that it backed an extension, but the two Opec sources said Moscow was reluctant to agree to deeper cuts even after talks on Wednesday between Saudi Energy Minister Prince Abdulaziz bin Salman and Russia’s Alexander Novak. The Saudi and Russian ministers have made no public statements so far since arriving to Vienna.
However, a Wall Street Journal reporter tweeted that Russia has opposed Saudi Arabia’s plan to deepen Opec+ cuts by 1.2 million bpd, citing sources.
Russia had so far said that it might be willing to extend existing cuts, which expire in March, but might find it difficult to sign up for deeper cuts.
The talks in Vienna were following a familiar pattern to previous meetings. In the past, Moscow had initially been hesitant before ultimately agreeing to joint cuts with Opec.
Ministers of the Organization of the Petroleum Exporting Countries held their formal meeting on Thursday, followed by a meeting of the broader Opec+ group including Russia today.
Moscow has said it is worried by the rise of shale oil in the US, which is not part of Opec. US producers have boosted output at the expense of the group. Sources had told Reuters earlier this month that Opec could agree deeper cuts even without Russia. —