Russian Energy Minister Alexander Novak met with domestic major oil companies on Tuesday to discuss the implementation of global oil production curbs and the possible extension of the current level of cuts beyond June, sources familiar with the plans told us.
The meeting is a further sign that Moscow is committed to supporting any future joint steps to stabilise oil markets for as long as may be required, after slashing its production to close to its quota under the global deal.
A source, familiar with the meetings detail, said no decision was made.
“Novak has just asked for opinions, whether to extend (the deal) or not. The opinions were divided almost equally,” the source said.
He added that it was decided to analyse the market, wait for demand to improve when the planes, grounded due to the coronavirus-combat measures, start to fly again.
Kommersant daily, citing three sources in oil industry, said Russia may keep the current level of cuts until September.
The energy ministry did not respond to a request for comment.
The Organization of the Petroleum Exporting Countries and other leading oil producers including Russia, a group known as OPEC+, agreed last month to cut their combined output by almost 10 million barrels per day in May-June to shore up prices and demand, which has been hit by the coronavirus pandemic.
The Kremlin said on Tuesday that the OPEC+ deal participants will look at how the situation on global oil markets develops before taking any policy decisions if additional efforts were needed to support the energy market and address overproduction.
Kremlin spokesman Dmitry Peskov also said the deal on global oil production cuts agreed last month had definitely proved effective and helped ward off negative scenarios on oil markets.
Sources said earlier this month that OPEC+ wanted to maintain existing oil cuts beyond June, when the group is next due to meet and after which the output reductions are currently set to be eased to 8 million bpd until December.
Novak said on Monday that he expected global oil demand and supply to balance in the next two months.
Brent crude prices LCOc1, which are currently around $36 a barrel, had fallen as much 65.6% in the first quarter as global oil demand plummeted by about 30% as the crisis curtailed travel and economic activity.