Russian president Vladimir Putin is not ruling out a possible further extension of the agreement between OPEC and Non-Opec nations to cut oil production once the deal expires in March 2018.
In a speech on Wednesday, during the Russian Energy Week event, Putin said that the deal Russia, other countries, and OPEC members reached in 2016 not only stabilized oil prices, but has also enabled opportunities to “implement promising projects for technological cooperation, because investments have returned to this sector of the world economy.”
The moderator of the session then decided to focus on what everybody in the energy industry was interested the most – the possibility of further extension of production cuts.
Putin said:”What we did together with OPEC, I think, is beneficial to the entire world economy. Whether we will extend these agreements or not, will depend on how the situation in the world market will develop. In principle, I do not rule it out, but we will proceed from those realities that will develop in March 2018.”
Asked by the moderator to comment on the length of the possible extension, Putin joked:” I tell him that we still do not know whether we will prolong or not, and he already asks me how long we will extend. When we decide whether to extend or not, then we will define the terms. But in general, if we talk about a possible extension, then, of course, at least until the end of 2018.”
In a report last month Joint OPEC-Non-OPEC Ministerial Monitoring Committee (JMMC), monitoring levels of compliance of the OPEC-Non Opec countries who have committed to keeping production suppressed, said that in August 2017, the OPEC and participating non-OPEC producing countries achieved “an excellent conformity level” of 116%, the highest level since the start of the Declaration of Cooperation.
To remind, in December 2016 eleven (now 10) non-OPEC oil producing countries cooperated with the 13 (now 14) OPEC Member Countries in a joint effort to accelerate the stabilization of the global oil market through voluntary cuts in total production of around 1.8 million barrels per day.
However, according to the report, there remains another 170 million barrels of stock overhang to be depleted. Supported by the improving forward structure in the futures market, floating storage has also been on a declining trend since June, JMMC said.
Brent oil price was at $55.81 per barrel Thursday morning, according to Reuters.
Offshore Energy Today Staff