Russia is not ready to commit to further production cuts under an OPEC/non-OPEC supply accord, with the oil market facing many uncertainties in the months ahead, the country?s energy minister Alexander Novak said Monday. “Lots depends on market situation in second half [such as] sanctions [and] trade disputes, so today we are discussing it,” he said at a press briefing in Moscow, where he was meeting with Saudi counterpart Khalid al-Falih at a Saudi-Russian economics summit.
“We think we need to continue to monitor the situation and see what happens in June so we can take a balanced decision in July.”US sanctions on Iran and Venezuela are likely to tighten the market, many analysts forecast, while US-China trade tensions could dampen global oil demand. OPEC and 10 non-OPEC partners, led by Russia, agreed in December to cut a combined 1.2 million b/d in the first half of 2019. Falih has urged the coalition to extend the cuts, saying global inventories are still too high.
Almost every member of the 24-country coalition is on board with a rollover of the agreement, except for Russia, which is vacillating over how much production it is willing to cut, Falih said in an interview with Tass news agency earlier Monday. “All the big producers in OPEC, as well as many non-OPEC countries like Oman, Kazakhstan, Azerbaijan have also supported the extension,” Falih said.
“The remaining country to jump on board now is Russia. I will wait for the Russian dynamics to work themselves out. There is a debate obviously within the country about the exact volume that Russia should be producing in the second half.” The coalition has yet to decide when it will meet to address the supply accord. OPEC originally scheduled its regular semi-annual meeting for June 25 in Vienna, with non-OPEC partners to join the talks the following day. But Russia has pushed for the date to be changed to July 3-4, with Iran, Algeria and Kazakhstan opposed.