Russia’s Novak says no need to revise OPEC+ deal parameters

BAKU, Mar 18 (PRIME) -- Russia does not see the need to revise the current parameters of the oil production cut deal between OPEC and non-OPEC states, Energy Minister Alexander Novak told reporters late on March 17.

“Now we do not see such a need, at least the issue was not discussed at today’s meetings… It is important for us to reach at least 100% fulfillment of the deal. This is the short-term goal,” he said.

In November 2016, OPEC and non-OPEC states including Russia first agreed to reduce their oil output to rebalance the market. In December 2018, the participants of the deal decided to cut production by an additional 800,000 barrels per day for OPEC and 400,000 barrels per day for non-OPEC states, including 230,000 barrels per day for Russia, from the level of October 2018.

FULFILLMENT OF DEAL

OPEC Secretary General Mohammed Barkindo that OPEC+ states improved fulfillment of the deal in February as compared with January. Saudi Arabia’s Energy Minister Khalid Al-Falih added that the fulfillment stood at over 90% in the month.

Novak said that Russia will reduce oil production by 140,000 barrels per day in March as compared with October 2018.

Al-Falih said that Saudi Arabia’s output will amount to around 9.8 barrels per day in March and April, and exports will stand at below 7 million barrels per day.

Saudi Arabia expects that OPEC+ states will fulfil the agreement by over 100% in March, he also said.

“It is important for OPEC+ to stay within the range to prevent oversupply… and at the same time undersupply in the medium and long term,” Al-Falih said, adding that there still was a risk of crude oversupply in the short term.  

Kazakhstan plans to overfulfil its production decline under the deal in March–May, Kazakhstan’s Energy Minister Kanat Bozumbayev said, adding that Kazakhstan may soon join the OPEC+ monitoring committee, a final decision will be made in April.

FUTURE OF DEAL

Novak said that the charter on cooperation of OPEC+ states may be prepared by the next ministerial meeting which will take place in Vienna on April 17–18.  

The members of the agreement will continue to monitor the oil market environment in May and June to decide on prolongation of the deal until the end of 2019, he also said.

“Now we see more stable prices. The volatility is much lower indeed, this is a positive factor which is mirrored by the market. Our agreement is valid until the end of the first six months of 2019... A seasonable hike in demand is expected, we will monitor the situation in May and June, and then discuss further decisions,” he said.

Novak also told his Azerbaijani counterpart Pyarviz Shakhbazov that the participants should discuss the future of the deal in May.

Al-Falih said that the members of the deal are ready to monitor the oil market environment in July–December as well and that they will continue their operations to rebalance the market.

End