Of all the signatories to the OPEC+ agreement forged to rebalance the oil market through production cuts, Russia is the lone holdout, according to Saudi Arabia’s Energy Minister Khalid Al-Falih, cited in The New Arab, and is the last member to not get on board with additional production cuts.
The comment was made during the meeting between Al-Falih and Alexander Novak that is taking place on Monday to discuss various energy projects between Russia and Saudi Arabia.
Russia has been a wild card during this entire production quota process, sometimes with various Russian officials disagreeing in the media over what oil price should be targeted, what production cuts will balance the market, how quickly to scale down production, how quickly to ramp production back up, and what compensation, if any, Russian oil producers should receive in exchange for restricting oil output.
Russia’s oil production prowess is substantial, and for the first time since the quota was implemented, Russia restricted its output in May. Russia’s oil production decrease in May was largely due to oil contamination issues.
“So, I think the remaining country to jump onboard now is Russia. I will wait for the Russian dynamics to work themselves out,” Al-Falih told TASS, adding that there was still a debate within Russia about what level of oil production Russia should target for H2 2019.
Russia and Saudi Arabia are the two largest oil producers that are part of the OPEC+ agreement.
Russian Energy Minister Alexander Novak said on Monday that there was a risk still that oil prices could fall to $30 per barrel, because the amount of oil produced in H2 could exceed market demand for oil—a sign that Russia may actually be on board for an extension of the production cuts, at least in some form and in some quantity.
