Russian President Vladimir Putin said on Saturday he had no concrete figures on possible oil output cuts as Russia and Saudi Arabia agreed to extend their accord to manage the oil market, known as Opec+, into 2019, following a meeting on the sidelines of the G20 summit between Mr Putin and Saudi Arabian Crown Prince Mohammed bin Salman.
Russia, one of the world’s biggest crude-producing nations, has been negotiating with the kingdom, Opec’s leader, over the timing and volume of any output reduction.
“Yes, we have an agreement to prolong our accords,” Mr Putin told reporters following the meeting. “There is no final deal on volumes but together with Saudi Arabia will do it. And whatever is the final figure, we agreed to monitor the market situation and react to it quickly.”
Opec and non-Opec oil producers will hold a ministerial meeting December 6-7 to discuss output cuts after oil prices in November suffered the largest monthly drop in a decade, losing more than 20 per cent as global supply has outstripped demand. Losses were limited on Friday, however, on hopes of a production cut agreement.
The comments from Mr Putin open the door for a deal at the Opec meeting this week in Vienna. Opec delegates said the leaders have signaled an agreement is possible, but the size of any potential output cut still needs to be agreed to.
Saudi Arabia said through its state-owned press agency that Riyadh and Moscow had held talks in Buenos Aires about “rebalancing” the oil market. While both talked about progress and extension of the cooperation, neither the Russian nor Saudis made any formal declaration about output volumes.
“This might be the critical breakthrough for Opec and non-Opec to cut,” said Derek Brower, a director at consultant RS Energy Group, in an interview with Bloomberg. “But the details are now what matter – how much will be cut, from when, for how long and, crucially, from what baselines.”
Brent hit a a 4-year high of $86.76 a barrel in early October before slumping to $58.71 Friday. Oil trading has been volatile over the last week as traders take positions ahead of the Opec gathering.
Saudi Arabia, the largest oil producer in Opec, and Russia, the world’s largest oil exporter, forged “a very historic Opec-plus agreement” Prince Salman said in June, the last time the countries extended their accord, part of a cooperative plan between Opec, Russia, and other non-OPEC producers that began in 2016 and includes Mexico, Azerbaijan and Kazakhstan.