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Russian Energy Minister Alexander Novak said Opec+ hasn’t made any decision yet on extending its deepest output cuts beyond July, while signaling a preference for avoiding repeated changes to the group’s current plan.
“Let’s see the situation, technical data, June figures and then the Opec technical committee will analyze the compliance, the market situation and the outlook,” Novak said last week at a conference of the Kremlin-backed Valdai Club.
Yet Russia, which is taking the biggest burden of the Opec+ cutbacks along with Saudi Arabia, indicated support for tapering the cuts from August, in line with the group’s agreement last month.
“I think, it would be good for the market if we changed our decisions as little as possible, at least in the mid-term period, for several months,” Novak said. “Then the market would see the situation as more stable.”
The Opec+ Joint Ministerial Monitoring Committee is scheduled to gather in mid-July for online talks on the future of the record production cuts. While they have helped boost oil prices from the depths of April, the alliance will also need to work out how a resurgence of new coronavirus cases in the US and elsewhere could hamper a nascent recovery in demand.
The Organisation of Petroleum Exporting Countries and its allies, including Russia, in April reached an agreement to curb oil production by as much as 9.7mn barrels a day in May and June. That cutback rate was later extended to July, with monthly meetings planned to take stock of the market.
As of now, the cuts are set to taper to 7.7mn barrels a day from August to December, and further to 5.7mn a day from next year until April 2022.