(Bloomberg) -- There’s almost unanimous agreement in OPEC to extend oil-production cuts, and holdout Russia could come on board before the deal’s expiry at the end of June, according to Saudi Arabia.
Saudi Energy Minister Khalid Al-Falih and his Russian counterpart, Alexander Novak, may both be in Japan for the Group of 20 summit this month, “in which case we will have an opportunity to further calibrate our positions,” Al-Falih said in an interview with Russian news service Tass. Oil has risen after the two ministers suggested Friday they would continue to manage the market, though they made no specific commitments on volumes.
While Saudi Arabia has wanted for some time to extend production curbs, Russia has been less resolute, saying it’s better placed to withstand lower prices than its Gulf ally. Both ministers are due to meet colleagues from the Organization of Petroleum Exporting Countries and allied producers at talks in Vienna in the coming weeks to decide on the future of the deal.
“I am fairly confident that from the OPEC side, almost everyone agrees that we need to extend the Declaration of Cooperation,” Al-Falih told state-run Tass. “The remaining country to jump on board now is Russia. I will wait for the Russian dynamics to work themselves out.”
The G-20 ministerial meeting on energy is scheduled for June 15-16 in Nagano, Japan, while the final leaders’ summit will take place on June 28-29 in Osaka.
Protecting Ties
While Russia may be happier with a lower oil price than Saudi Arabia, the OPEC+ accord has boosted its federal budget amid higher prices for energy commodities. President Vladimir Putin has shown he’s reluctant to walk away from the agreement, which also ensures his political partnership with Saudi Arabia as economic ties tighten.
State oil giant Saudi Aramco is looking at “multiple” projects in Russia, Al-Falih told Tass. They include the Arctic LNG 2 gas project -- in which Aramco is still willing to buy a stake -- and others with Gazprom (MCX:GAZP) PJSC and Rosneft PJSC, he said. Saudi Arabia also may be interested in taking a stake in Russian petrochemical producer Sibur Holding, he said.