with agency report
15 July 2018, Sweetcrude, Lagos — One of the Organization of the Petroleum Exporting Countries, OPEC’s partner in the Declaration of Cooperation, DoC, Russia, has voiced its desire to see the recent output increase agreement go beyond 1 million barrels per day, a report by Bloomberg has said.
OPEC, Russia and other oil-producing countries in June, agreed to boost crude oil output by 1 million barrels per day in order to reduce prices which many feared could hit $100 per barrel if the group does not stop cutting production.
However, Russia’s Energy Minister Alexander Novak said there is a need to boost production more than the 1 million barrels a day.
“I can’t rule out that if there is a need for more than 1 million barrels we will be able to quickly discuss it all together and make all necessary decisions,” Novak had told reporters in Moscow on Friday. The producers have “all needed tools,” if necessary, he said.
Oil prices have remained near their highest in more than three years despite pledges by Russia, Saudi Arabia, and their allies last month to boost production.
Despite the increase by 1 million barrels per day to begin this month, supplies are being drained by worsening losses in Venezuela, Libya and looming renewed U.S. sanctions on Iran which could curb its exports.
“If there is a need, we can always contact other countries” to discuss the possibility of increasing further, Novak said. “We discussed this as an option — this communication — but as to the need of any decision now, it’s too early to talk about it,” Novak said.
Saudi Arabia and Russia are under pressure to increase supplies to make up for the shortfall however, OPEC is yet to come public with sharing quota.
OPEC and its partners had earlier agreed to limit output by 1.8 million barrels per day in 2016.
The agreement reached 145 percent compliance in May, after which the group cut it back to 100 percent last month.
Novak said that last month’s decision does not limit members of the coalition from raising output only in proportion to the cuts agreed in 2016 but allows those with the capacity to boost production.
Questions on tensions in the group because of the supply allocations are “fantasies,” he said.
Russia, which pledged to raise its oil production by 200,000 barrels a day, has been quick to meet the target. The country has added back nearly 80 percent of earlier 300,000 barrels cut so far in July, Novak said. The country would be fully in line with last month’s decision by the end of July, he said.