Vagit Alekperov, the chief executive of the second-biggest Russian oil producer, Lukoil, expects OPEC and its Russia-led non-OPEC partners to decide next March whether to roll over the production cuts through the rest of 2020. “It is going to be decided in March,” Alekperov told reporters on Wednesday, as carried by Reuters, referring to the ongoing production cuts which currently expire in March 2020. OPEC and its non-OPEC allies are set to meet in the first week of December to discuss the state of the global oil market and possible additional moves to rebalance supply and demand.
Despite reports and speculation that the OPEC+ coalition could consider deeper cuts when energy ministers meet in Vienna on December 5 and 6, the partners may not make a decision on the ongoing cuts and leave such discussions for March, when the restrictions are currently set to expire. Going into the December meeting, the Saudis are reportedly pressuring non-compliant cartel members to fall in line with their quotas, instead of pushing aggressively for a deeper overall cut. Russia is still non-committal, as it has been ahead of all previous such meetings, before agreeing to rollover of the deal.
OPEC and its partners could decide in December to wait and see how global oil demand growth will hold up in the coming months, and only decide how to proceed with the cuts in March next year. Separately, Kirill Dmitriev, chief executive at the Russian Direct Investment Fund (RDIF), said on Wednesday that oil demand growth could accelerate if trade wars abate.