Russia silent on prospects of deal with OPEC amid positive signals from Gulf countries
MOSCOW. April 24 (Interfax) - Russia, one of the key participants in the agreement to reduce oil production, remains silent about the prospects of its extension against the backdrop of positive signals received in recent days from Persian Gulf countries.
Representatives of Saudi Arabia and Kuwait indicated clearly on Thursday that OPEC is generally prepared to extend the agreement to reduce oil production for the second half of 2017. Saudi Energy Minister Khalid al-Falih said at an energy conference in Abu Dhabi that support is broadening among OPEC members for extending the initial agreement for another six months, although no decisions have been made yet. Kuwaiti Oil Minister Essam Al-Marzouk said he expects the agreement to restrict oil production to be extended.
Russia, meanwhile, has not changed its rhetoric. Energy Minister Alexander Novak still says it is necessary to analyze the situation in May, and avoids giving any kind of forecast.
"Such a possibility [of extending the agreement] is provided for by the current agreements, it is possible to extend for six months. But no decisions have been made as of today and, in my view, this situation will be discussed at the next ministerial meeting, which will be held on May 24 in Vienna ahead of the OPEC summit. It makes absolute sense to consider this in then, because we will already have data on the fulfillment of the agreement for four months, there will be an understanding of the May situation and a forecast for the second half of the year," Novak said in an interview with TV channel Rossiya 24.
"It's important in making a decision to take into account the balance of demand and supply, achievement of the goals that were set in adopting the agreement, which were foremost reducing inventories of oil and oil products, getting overproduction and excess supply off the market in order to restore the market itself, and ensuring a decrease in volatility and attraction of investment," Novak said.
Asked about Russia's position, Novak reiterated that the position is still being formed.
"We are currently at the stage of analyzing the current situation. A decision on extension has not been made, just as a decision on not extending. It's too early to talk about this. We're discussing this with companies, discussing with our other government agencies and I think that by the time the meeting is held in May we'll form our position based on the current situation," Novak said.
He confirmed the high estimate for the level of compliance with the agreement.
"Today one can already say based on data for three months that the agreement is being fulfilled well, the overall level of output reduction by OPEC and non-OPEC countries for March was about 1.7 million barrels per day. This is a very high figure. The level of compliance is slightly more than 100%," Novak said, adding that this was the "first time in many years" that OPEC countries are almost completely fulfilling their obligations.