OPEC+, the global organization of oil-producing economies including Russia is reportedly leaning towards maintaining the current production restrictions for three more months amid speculations of deliberation by the body on increasing the production to support its ailing members.
Russia, one of the external allies to OPEC has been at the forefront for lobbying at holding off the 2 million barrels a day production increase as demand continues to remain low while more and more countries enter the next phase of lockdowns.
Oil prices drop 10 percent in London last week as traders see signs of weaker demand while the Libya peace deal floods the market with additional quantities.
Russian oil companies reportedly met the country’s Energy Minister Alexander Novak to explore the possibility of delaying the easing of Opec+ output cuts by three months.
While there have been speculations that the Organization of Petroleum Exporting Countries (OPEC) and its allies forming OPEC+ have been considering increasing the production cuts, the primary subject of discussion seems to revolve around extending the current status quo.
Russia and its oil companies have been the biggest contributors to the production cuts after the world’s largest oil producer, Saudi Arabia. Thus any change in the status quo would require a Russian blessing.
Russian Energy Minister has been prompt at consulting senior executives from the country’s oil producers before any OPEC+ policy decisions with the current one ending this month.
The country is yet to express its formal stand on the matter as internal discussions still are ongoing within the Russian ranks.
Earlier in April, OPEC+ agreed to reduce 9.7 million barrels from the market every day to recover oil prices from the historic slump caused by the coronavirus pandemic. The body added back 2 million barrels a daily as economies began to recover in August.