Close Menu
    Facebook X (Twitter) Instagram
    Facebook X (Twitter) Instagram
    SweetCrudeReportsSweetCrudeReports
    Subscribe
    • Home
    • Oil
    • Gas
    • Power
    • Solid Minerals
    • Labour
    • Financing
    • Freight
    • Community Development
    • E-Editions
    SweetCrudeReportsSweetCrudeReports
    Home » Azerbaijan signals OPEC wants big cuts from non-OPEC producers

    Azerbaijan signals OPEC wants big cuts from non-OPEC producers

    November 25, 2016
    Share
    Facebook Twitter LinkedIn WhatsApp
    *A person carrying an umbrella walks by the Ogranization of the Petroleum Exporting Countries (OPEC) headquarters in Vienna, Austria October 4, 2016. REUTERS/Heinz-Peter Bader
    *A person carrying an umbrella walks by the Ogranisation of the Petroleum Exporting Countries (OPEC) headquarters in Vienna, Austria. REUTERS/Heinz-Peter Bader

    24 November 2016, Baku/Dubai/Moscow — OPEC may ask oil producers outside the cartel to make big cuts in output, Azerbaijan said on Thursday, highlighting the challenges in striking a deal as the two sides enter the final stages of talks aimed at cutting production to stabilise prices.

    The oil minister of Azerbaijan, which is not a member of OPEC, was quoted in a newspaper as saying the cartel may want non-OPEC producers to cut output by as much as 880,000 barrels per day (b/d) – a figure which analysts said could help wipe out excess crude supplies and start to eat into record inventories.

    However, the energy minister of Russia, the largest non-OPEC producer, said he hadn’t heard about such a proposal, and that OPEC’s earlier suggestion had been for members outside the cartel to reduce output by 500,000 b/d.

    An OPEC source told Reuters the group had yet to decide on the final figures to be discussed on Nov. 28, when OPEC and non-OPEC experts meet in Vienna.

    Oil prices were little changed on Thursday amid uncertainty over prospects for a deal to reduce output.

    “It could be expected that OPEC members may ask non-OPEC countries to cut production volumes for the next six months starting from Jan. 1 2017 … by 880,000 barrels from the total daily production,” Azeri newspaper Respublika quoted the country’s oil minister, Natig Aliyev, as saying.

    OPEC itself is expected to discuss production cuts of 4.0-4.5 percent at its ministerial meeting on Nov. 30, but members Iran and Iraq still have reservations about how much they want to contribute.

    Such a cut would bring OPEC’s current output down by more than 1.2 million b/d, according to Reuters calculations based on the group’s October production, and is toward the upper end of market expectations.

    OPEC has long insisted it wants non-OPEC producers to properly participate in global output cuts to support prices, citing tensions at the start of the millennium when Russia promised to join cuts but raised output instead.

    Russia has said it wants to help rebalance the market but prefers to freeze its output, which is around a post-Soviet high of more than 11 million b/d, rather than cut it.

    Russian Energy Minister Alexander Novak said on Thursday Moscow was working with Kazakhstan and Mexico, though not the United States, on joint output curbs, but reiterated it preferred to freeze output over cuts.

    “According to our plans, (Russia’s) oil output is going up next year. If we keep production at the current level we are making our contribution, for us that essentially means a cut of 200,000-300,000 barrels per day (in 2017)”, he said.

    That could seem as a rather small contribution to OPEC members, especially its leader Saudi Arabia and its Gulf allies, which have been insisting on full participation by Russia.

    A senior OPEC delegate said earlier this week full participation by Moscow would be required: “Statements from Moscow indicating they are not willing to participate in a cut but just to freeze – this will make it difficult for OPEC to rebalance the market alone and bring prices up.”

    A cut of 880,000 b/d would represent less than 2 percent of current total non-OPEC output.

    But given few non-OPEC producers are expected to participate in the cuts, the burden could be heavy on those that do so – potentially Russia, Kazakhstan, Azerbaijan and Mexico, all of which rely heavily on oil revenues.

    Should OPEC and non-OPEC members reach a deal to cut 1 million b/d and 880,000 b/d in production respectively, it would immediately help the market turn into a supply deficit and help erode record stocks amounting to over 3 billion barrels.

    Novak said on Thursday global oversupply had shrunk to 1 million b/d from as much as 1.8 million at the start of the year.

    *Nailia Bagirova, Rania El Gamal & Olesya Astakhova; Vladimir Soldatkin & Dmitry Zhdannikov; Editing – Alexander Winning & Mark Potter – Reuters

    Related News

    Army destroys 11 illegal refineries, arrests 50 oil thieves in Niger Delta

    European Commission to propose floating Russian oil price cap

    Nigeria needs to recalibrate its budget for lower oil prices – IMF

    E-book
    Resilience Exhibition

    Latest News

    Analysts on Chevron winning arbitration over Exxon in Hess deal

    July 19, 2025

    EU’s new Russia sanctions aim for more effective oil price cap

    July 19, 2025

    US drillers add oil/gas rigs for first time in 12 weeks, Baker Hughes says

    July 19, 2025

    SLB beats quarterly profit estimates on steady oilfield services demand

    July 19, 2025

    BP to sell US onshore wind business to LS Power for undisclosed sum

    July 19, 2025
    Demo
    Facebook X (Twitter) Instagram
    • Opec Daily Basket
    • Oil
    • Power
    • Gas
    • Freight
    • Financing
    • Labour
    • Technology
    • Solid Mineral
    • Conferences/Seminars
    • Community Development
    • Nigerian Content Initiative
    • Niger-Delta Question
    • Insurance
    • Other News
    • Focus
    • Feedback
    • Hanging Out With Markson

    Subscribe for Updates

    Get the latest energy news from Sweetcrudereports.

    Please wait...
    Please enter all required fields Click to hide
    Correct invalid entries Click to hide
    © 2025 Sweetcrudereports.
    • About Us
    • Advertise with us
    • Privacy Policy

    Type above and press Enter to search. Press Esc to cancel.