‘Russia Ready to Continue with OPEC+ Deal Even After 2022’￼
………As Saudi Arabia Energy Minister Pays Surprise Visit to Russia
Russia is likely to continue its participation in the OPEC+ oil production agreement even after it officially expires at the end of this year, Russian deputy prime minister, Alexander Novak said after a surprise meeting with Saudi Arabia’s energy minister yesterday.
Novak and Saudi’s energy minister, Prince Abdulaziz bin Salman, met in St Petersburg International Economic Forum while the latter not being listed on an official schedule, even as many other guests avoided the flagship annual event, news reports said.
Saudi Arabia and Russia, the leaders of the OPEC+ deal, have reiterated they would stick together in the pact, despite the current hostilities in Ukraine which has pitched Russia against the West, and the plunge in Russian oil production as a result of teething sanctions.
Currently, Russia is being estimated to be more than 1 million barrels per day (bpd) below its target production level under the OPEC+ agreement.
Earlier this month, Russia’s foreign minister Sergey Lavrov and his Saudi counterpart Prince Faisal bin Farhan Al Saud said that the OPEC+ alliance is solid, with the level of cooperation within it strong.
“They noted the stabilising effect that the tight cooperation between Russia and Saudi Arabia has on world markets for hydrocarbons in this strategically important sector,” a report said.
At the end of last May, Wall Street Journal reported that some OPEC members mulled the idea of suspending Russia in an oil production deal as Western sanctions hurt the nation’s ability to produce more, citing OPEC delegates.
The report said exempting Russia could pave the way for Saudi Arabia, the United Arab Emirates and other OPEC members to produce more to meet the production targets.
Since then, both Saudi Arabia and Russia have stressed the importance of their OPEC+ partnership, although the OPEC+ group hasn’t commented on Russia severely lagging in production quotas since buyers in the West started shunning its crude.
During the latest OPEC+ meeting, the group decided to accelerate its monthly oil production increase to nearly 650,000 bpd as it looks to compensate for falling production in Russia amid expectations of strong fuel demand this summer.
Under the production table for July provided by OPEC, Saudi Arabia and Russia each have a quota of 10.833million bpd next month. Russia, however, was already pumping nearly 1.3 million bpd below its target in May, an OPEC+ document seen by Reuters showed yesterday.