Russian president Vladimir Putin has given the first indication that his country, which is one of the world’s biggest oil producers, may be amenable to extending the production cuts agreed by the OPEC+ group if the circumstances warrant it.
Speaking at a Valdai Discussion Club meeting, Putin said he believed there:
“is no need to change anything in our agreements, we will closely watch how the market is recovering. Consumption is on the rise. However, we do not rule out that we could keep existing restrictions on production, and not remove them as quickly as we had planned to do earlier.”
He added that Russia may also be open to cutting production further if necessary, although he indicated that he didn’t believe this was currently needed.
The OPEC+ group comprises the members of the OPEC cartel plus some other non-member oil-producing nations, of which Russia is the most significant. Its combined efforts have removed 7.7 million barrels per day (bpd) from the oil markets and have helped stabilise prices following the slump in demand caused by the COVID-19 pandemic. Reduced production from US shale operators like ExxonMobil, which also makes Mobil slideway oil and other industrial lubricants, has also help rebalance the markets.
The group is currently planning to reverse 2 million bpd of its cuts early next year. However, with coronavirus cases rising in many countries around the world, there is a concern that demand may not bounce back as quickly as expected, so Putin’s comments may reassure the markets somewhat.