OPEC and non-OPEC together to study long-term oil cooperation
Agreement extension for the biggest Oil producers to manage Oil market.
The Organization of Petroleum Exporting Countries (OPEC) and non-OPEC oil producers, including Russia, will discuss long-term cooperation when they meet in June as they seek to avoid major market shocks. That is the main topic discussed in London International Petroleum (IP) Week.
According to UAE Energy Minister Suhail Al-Mazroui cooperation between OPEC’s biggest producer Saudi Arabia and non-OPEC member Russia will extend beyond 2018. “I think the potential is huge for cooperation, whether it is focused on the oil sector, or the broader energy sector,” Mazroui said in an interview in London.
At the end of 2016, OPEC and ten producers outside the Cartel signed an agreement to reduce oil production in order to support crude oil prices after the collapse occurred in the second half of 2014. In December, the producer countries decided to extend the terms of the agreement until the end of 2018. In June OPEC will meet in Vienna countries that adhere to the agreement to cut production to discuss the status of the agreement and future plans to manage the oil market.
“Definitely if this group continued to work together in the future that will enable the world economy to benefit and to grow and we could plan on avoiding any major surprises to the supply and demand imbalance,” – added Mazroui. The idea of extending cooperation beyond 2018 when the current oil cut agreement expires has led many analysts to say that OPEC and Russia are effectively creating a wider super group, with Moscow becoming a near-permanent OPEC member. “I don’t want to concentrate on one country but definitely Russia is a very important partner in the group. But it is not only Russia, it is all the countries that have committed to deliver in this agreement.” Mazroui said he expects the United Arab Emirates to exceed its oil production cut target in the first quarter of this year.
OPEC members have been reducing output by 1.2 million barrels per day to push prices upwards. There are also roughly a dozen other non-OPEC nations that have pledged to cut 600,000 additional barrels per day, with Russia making half of these additional reductions.
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