OPEC, Russia Consider Extending Oil Output Cuts to End of Year
Saudi Arabia and other OPEC countries may extend their unprecedented oil-production cuts until the end of 2020, but seek support for this from Russia within the OPEC+ framework. In the face of plummeting demand and oil prices due to the economic crisis brought about by the coronavirus pandemic, OPEC+ agreed last month to cut output by 9.7 million barrels per day in May and June. Now, discussions led by Saudi Arabia on maintaining the output cuts into July and beyond are reportedly underway, ahead of an OPEC+ online conference due to take place in the second week of June, which will review output policy. Russian Energy Minister Alexander Novak met with domestic oil companies on Tuesday to discuss the idea of extending the current level of cuts, but no decision has been made. Some argue for a wait-and-see approach as countries begin to reopen their economies and airlines begin to fly again. Russian President Vladimir Putin and Saudi Crown Prince Mohammed bin Salman agreed during a telephone call on “close coordination” regarding output restrictions, the Kremlin said on Wednesday.