OPEC is close to reaching an agreement to extend the production cut deal beyond its current expiry date at the end of June, said Khalid al-Falih, the energy minister of OPEC’s largest producer and de facto leader, Saudi Arabia.
“On the OPEC side, a rollover is almost in the bag. The question is to calibrate with non-OPEC,” Reuters quoted al-Falih as saying at the St. Petersburg International Economic Forum in Russia.
“I’m hoping it will be an easy decision and that we’ll roll over, but if it’s not, we will be flexible in terms of our position in the kingdom,” al-Falih said.
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OPEC and its Russia-led non-OPEC allies are withholding a total of 1.2 million bpd of oil supply from the market until the end of June and are set to meet in coming weeks to discuss how to proceed with their oil supply management policies in place since the start of 2017.
The oil price slide of the past two weeks leaves OPEC and its partners little choice but to roll over the cuts, analysts say.
After a meeting with Russia’s Energy Minister Alexander Novak, Saudi Arabia’s al-Falih said that he was sure that the larger OPEC+ group would roll over the production cuts through the end of this year.
There won’t be a need to deepen the cuts, while the situation with oil supply in Iran, Venezuela, and other countries will show if OPEC and allies need to scale back the cuts “a little bit,” al-Falih said, as carried by Bloomberg.
Earlier this week, al-Falih sought to assure the oil market that the Saudis and the larger OPEC+ group would do whatever it takes to bring supply and demand to balance.
Saudi Arabia and Russia, the respective leaders of the OPEC and non-OPEC groups part of the production cut deal, have been allies in oil market management for more than two years now, although the Saudis need oil prices at $85 to balance their budget, while Russia claims that it’s fine with the current price of oil at $60-65.
This article was originally published on Oilprice.com