Russia and Saudi Arabia agree to extend oil production cuts for at least a month

An OPEC technical meeting will also be held on June 4, at which experts will discuss the impact of the coronavirus pandemic on the oil market.

US, WASHINGTON (ORDO NEWS) — Russia and Saudi Arabia agreed on the need to extend the maximum level of reduction in oil production in OPEC + by at least one month. Future plans will depend on the situation on the market, a source in the negotiations said.

“We agreed that it is necessary to extend for at least a month. We will continue to look at the situation,” he said.

Officially, this information is not commented on in the energy ministries of countries. The agency’s interlocutor also added that the energy ministers of Russia and Saudi Arabia are in constant contact and “in mutual understanding”. At the same time, the agency’s source said, they were not satisfied with the data on the fulfillment of obligations by a number of other countries in May, which were announced yesterday.

“Until the quota compliance problem is resolved, a meeting will not be scheduled,” the TASS interlocutor said. Another source confirmed that in the schedule for June 4 there is only a technical meeting at which ministry representatives will discuss “the impact of the coronavirus pandemic on the oil market, make forecasts for the coming months.”

The OPEC + ministerial meeting was originally planned for June 9-10, 2020. At it, as previously reported, the question of further actions on the oil market was to be discussed. According to the April agreements, OPEC + countries reduce oil production by 9.7 million barrels per day (b / s) only during May – June. Since July, restrictions have been planned to soften and reduce already 7.7 million bps.

However, in May, Saudi Arabia proposed to maintain the maximum quota even after June. Several options were discussed, including an extension until the end of the year and for a period of up to three months. At the same time, it was proposed to postpone the meeting to an earlier date – June 4, this would allow the formation of delivery schedules and prices for July.

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