Photo: Leonhard Foeger / Reuters
Before the next meeting of OPEC+ the parties began to prepare to go to extreme measures and seriously increase the options of reducing production. This was reported by TASS source involved in the negotiations.
Previously, other sources have indicated that the discussion concerns only the remaining summer months, and the main uncertainty remains the position of Russia.
According to the deal, OPEC+, signed in April, may and June production cuts will amount to 9.7 million barrels per day. In the second half of the year it should drop to 7.7 million barrels. Under the new proposal, the level of 9.7 million must be maintained even in July and August, and by the end of this year.
Saudi Arabia and its partners in OPEC unhappy with oil prices, which were fixed at 35 dollars per barrel. In this context, and amid serious problems in their own economy Riyadh went to unilaterally cut production by another million barrels.
Yesterday, 26 may, Russian energy Minister Alexander Novak held a meeting with heads of oil companies to develop a common position. According to Reuters, about half of the participants agree with the extension of existing quotas for July and August. However, sources Bloomberg inclined to believe that Moscow would favour the permanence of the conditions limiting production.
This situation can lead to aggravation of contradictions between the parties to the agreement. On a similar occasion in March, we launched a price war, Russia and Saudi Arabia.
Video, photo All from Russia.