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Saudi Arabia and Russia discuss Opec+ co-ordination

October 19, 2020

Crown Prince Mohammed bin Salman and President Vladimir Putin agree on further co-ordination to support market stability

In a call on Saturday, Russian President Vladimir Putin and Saudi Arabia’s Crown Prince Mohammed bin Salman reiterated their commitment to work together to maintain the stability of the world energy market in line with the Opec+ alliance framework.

'The field of fighting the spread of coronavirus, was discussed as well as reasserting the two sides' continuation of co-ordination, in order to support the oil markets' stability and the growth of the world economy,' according to the Saudi Press Agency.

The latest call between the two leaders followed an October 13 phone conversation and called on producers in the alliance to stick to output cuts.

The two leaders “had an extensive exchange of views on the implementation of current agreements within the Opec+ format,” the Kremlin said according to the Russian news agency Tass. “Both sides once more emphasised their readiness for further close co-ordination in this field to maintain stability in the world energy market.”

Opec+, the producer alliance headed by Saudi Arabia and Russia, is expected to stick to tapered output cuts to be made at the end of the year, UAE energy minister Suhail Al Mazrouei said last week. The group does not anticipate a peak in oil demand before 2040, he said.

Opec+ undertook a historic level of production cuts of up to 9.7 million barrels per day between May and July to reverse a record plunge in demand due to the pandemic.

The alliance is drawing back 7.7m bpd from the markets from August to December 2020. The oil producers are likely to reduce the output cut to 5.8m bpd from January 2021 until April 2022.

The agreement will be in effect for two years, but the deal’s parameters may be revised in December 2021.

Last week, the International Energy Agency said the pandemic may usher in the slowest decade of energy demand in a century and the global response to the coronavirus can reshape the energy landscape for years to come.

thenationalnews

oil and gas