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News // Middle East and OPEC

Russia sees OPEC & Co exit oil cuts pact very smoothly

25 December 2017 , 13:00Nefteagz.RU606

OPEC and its non-OPEC allies led by Russia will exit the production cuts deal very smoothly, and could extend supply restrictions in some form to ensure they would not be flooding the market, Russia’s Energy Minister Alexander Novak told Reuters in an interview published on December 22, 2017.

 

Novak said that he saw no direct connection between the oil production cuts and Saudi Arabia’s plan to list 5 % of its oil giant Saudi Aramco - currently planned for the 2nd half of 2018 - in what would be the world’s biggest IPO ever.

«Everyone in the market is interested in achieving balance,» said Alexander Novak, when asked if Saudi Arabia would abruptly exit the cuts as soon as it lists Aramco at some point next year.

 

Under the current deal between OPEC and a Russia-led group of non-OPEC producers, the partners will be withholding 1.8 million bpd from the oil market by the end of 2018 to draw down the oil overhang and lift oil prices.

«Detailed parameters will be discussed by the time we approach balance. There could be different timeframes, depending on forecasts of supply and increasing demand in global markets,» Novak told Reuters.

 

«There is a consensus among the (oil) ministers that we should avoid oversupply on the market when exiting the deal,» the minister added, noting that there was an option to extend the pact after the end of 2018.

The Russian minister sees next year as «a year of balance» and expects the oil market to return to balance in Q3 or Q4 2018.

 

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