Moscow and Riyadh will extend the pact on the reduction of oil production by the end of June 2018


Saudi Arabia and Russia have agreed to extend the agreement to reduce oil production by the end of the first half of 2018, the "Oil and Gas Information Agency" reports referring to The Wall Street Journal.


The Ministry of Energy of the Russian Federation has not yet commented on this information.


Earlier, Saudi Energy Minister Khaled Al-Faleh, as well as the ministers of Venezuela, Kuwait and Angola, spoke of the need to extend the deal. Russia did not officially voice its position on this matter.


As enkorr reported, at the end of November 2016, the OPEC member countries signed an agreement in Vienna to reduce oil production by 1,2 million barrels per day in relation to October of the same year. A similar agreement was signed on December 10, 2016 by 11 non-residents of OPEC, including Russia, which pledged to reduce the production of "black gold" by another 0,6 million barrels per day.


Initially, it was assumed that the pact will operate in January-June 2017, but due to the fact, that the degree of its impact on the world market was significantly lower than expected, on May 25, the signatories of the Vienna agreements prolonged their validity for another nine months, until the end of March 2018.


Many industry experts warn that the end of the OPEC + agreement will lead to a drop in prices in the II quarter of 2018.


Meanwhile, in the opinion of Andrei Tereshka, Deputy Director of the Department of Oil Production and Transportation of the Ministry of Energy of the Russian Federation, the extension of the deal to reduce oil production between residents and non-residents of OPEC in the long term could destabilize the market.


Previously, the head of "Rosneft" said, that the agreement of OPEC with other oil-producing states on the reduction of oil production gives the market only a breather, but this is "not a systemic measure." According to Sechin, the time of low oil prices has come for a long time.


The OPEC + deal will not have a large-scale long-term effect, says World Bank Chief Executive Officer Kristalina Georgieva.


From the WSJ report it is not yet clear whether Russia and Saudi Arabia could agree on deepening the reduction in oil production within the framework of the OPEC + deal.


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