Russia is not on board with a proposal of OPEC leader Saudi Arabia that the OPEC+ coalition deepen the collective cut by 1.2 million barrels per day (bpd), Summer Said, Senior Middle East Correspondent at The Wall Street Journal, tweeted on Wednesday from Vienna, quoting sources.
The energy ministers of Russia and Saudi Arabia, Alexander Novak and Prince Abdulaziz bin Salman, are meeting in Vienna at the time of writing, before a panel of the OPEC+ group, including the two ministers, convenes to discuss how the coalition should react to the depressed global oil demand amid the coronavirus outbreak.
Saudi Arabia and OPEC are trying to convince Russia to sign up to a massive deeper cut in Q2. So far Russia has appeared uncommitted, although Russian President Vladimir Putin suggested this weekend that Moscow would continue to play ball and cooperate with OPEC, even though it sees current oil prices as “acceptable.”
Russia is looking to have its participation in any fresh cut at the minimum possible level, a source told Reuters on Wednesday.
However, Saudi Arabia wants the OPEC+ coalition to agree to a collective cut of more than 1 million bpd, delegates told Bloomberg on Wednesday.
On Tuesday, the Joint Technical Committee of the OPEC+ group, meeting before the regular OPEC meeting, considered bigger oil production cuts—between 600,000 bpd and 1 million bpd, and ended up recommending additional cuts of at least 600,000 bpd.
OPEC’s smallest producer, Equatorial Guinea, thinks that the OPEC+ group may consider rolling over the current cuts for another year and deepening the cuts in Q2, Equatorial Guinea’s energy minister Gabriel Obiang Lima told S&P Global Platts on Wednesday, noting that an additional cut of 1 million bpd would “send a very clear message and we just need to meet to confirm that.”
By Tsvetana Paraskova for Oilprice.com
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That is why Russia won’t accept deeper cuts.
Dr Mamdouh G Salameh
International Oil Economist
Visiting Professor of Energy Economics at ESCP Europe Business School, London