In an exclusive report by Reuters, Russia’s Energy Minister Alexander Novak conducted talks with domestic major oil companies on Tuesday, May 26, 2020, to discuss the implementation of global oil production curbs. Sources told Reuters, the recent meeting indicated that the Kremlin was willing to cooperate with the Organization of the Petroleum Exporting Countries (OPEC) decision regarding the possible extension of the current level of cuts beyond June.
Russia Sets to Support Oil Market Stability
As reported by a source, the meeting had ended without any major decision adding that “Novak has just asked for opinions, whether to extend (the deal) or not. The opinions were divided almost equally.” The minister added that Kremlin would be examining the global oil market and the conditions related to travel restrictions due to the coronavirus outbreak across several countries.
Nonetheless, the latest initiative showed that Moscow was prepared to support any future joint steps to stabilize the global oil markets for as long as may be required, after cutting its output quota under the global deal. Novak said on Monday that he expected to see stability in the global oil demand and supply in the next two months.
Expecting a positive result of the global oil market, Kremlin spokesman Dmitry Peskov also said the deal on global oil production cuts agreed last month had definitely proved effective and helped to protect from negative scenarios on oil markets. While the energy ministry has not released his official statement but Kommersant daily, citing three sources in the oil industry, said that Russia is likely to keep the current level of oil output cuts until September.
OPEC-led Global Oil Deal
The global oil industry had been severely shaken due to a sharp decline in demand because of the travel restrictions imposed by governments across countries in attempts to curb the spread of the pandemic. Brent crude prices, which are currently around $36 a barrel, had sharply declined as much 65.6% in the first quarter as global oil demand fell by about 30% as the crisis curtailed travel and the closure of economic activities.
Last month, the OPEC and other leading oil producers including Russia, a group is known as OPEC+, had agreed to cut their combined oil output by almost 10 million barrels per day (BPD) in May-June as to address the oil price crash. The Kremlin said on Tuesday that the OPEC+ deal participants would observe the global situation related to oil markets ahead of any major policy decisions to bring stability in the demand and supply of the oil sector.
It was reported by sources that OPEC+ earlier this month sought to maintain the existing oil cuts beyond June and expected that the group would continue its target of the output reductions, which are currently set to be eased to 8 million BPD until December.
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