Saudi Arabia works on convincing Russian Federation to join oil cuts

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The Organisation of the Petroleum Exporting Countries (Opec) has made a planned cut in oil production effectively conditional on the contribution from non-Opec producer Russian Federation, delegates said on Thursday as the group gathered in Vienna for a meeting aimed at supporting battered oil prices.

"We don't need permission from anyone to cut", he said.

Oil prices fell along with weak stock markets on Thursday, but trading was tepid ahead of a meeting by the Organisation of the Petroleum Exporting Countries (OPEC).

OPEC's de facto leader Saudi Arabia has indicated a need for steep output reductions from January, fearing a glut, but Russian Federation has resisted a large cut, news agency Reuters reported from Vienna.

"OPEC is an independent organization, not a part of the US Department of Energy to take orders from Washington", said Zangeneh on Wednesday. The OPEC-Russia alliance was made necessary in 2016 to compete with the vastly increased production of oil by the United States in recent years.

Iraqi Oil Minister Thamer Ghadhban said Iraq, which is OPEC's second-largest producer behind Saudi Arabia, would support and join a cut.

The producer group's de facto leader, Saudi Arabia, has indicated a need for steep reductions in output from January but has come under pressure from US President Donald Trump to push oil prices lower. But they're contending with vociferous opposition from the USA president, who's taken to using his Twitter account to berate the group's policies and sees low oil prices as key to sustaining America's economic growth.

The long rally in oil prices lasted until October.

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The Trump administration has sent the country's special envoy for Iran Brian Hook to Vienna, where he held talks with the Saudi energy minister one day before OPEC's 175th meeting.

Barclays said it expected "the global economy to slow over the next several quarters" although it added that "not one major economy is near recession".

Some experts say that gives the US some leverage over the Saudis, though Al-Falih denied that on Thursday.

"Today, it is vital that we thoroughly examine the potential gap between supply and demand in 2019, and how this might impact inventory levels and the extremely hard won market balance we have achieved over the past two years", Mazrouei said.

"The oil cut will be between 1.0 and 1.3 million bpd".

Although Russia, the largest producer in the OPEC+ group, has agreed to a cut in principle, the eventual size of their contribution remains undefined and will be key to putting together the final deal. Trump said on Twitter on Wednesday, Xinhua news agency reported.

One issue that might complicate relations between the USA and OPEC is the murder of Saudi Arabian journalist Jamal Khashoggi by people linked to the government in Riyadh. If Russia contributed around 250,000 bpd, the overall cut could exceed 1.3 million bpd.

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