President of Russia Vladimir Putin is not ruling out a possible prolongation of the deal between Non-Opec nations and OPEC to cut oil production rates after the deal loses force in March 2018.
On Wednesday, during the Russian Energy Week meeting, Russian President pointed out that the deal Russia, OPEC members, and other nations signed in 2016 not only normalized prices of oil but also provided a chance to price for oil prospective projects for industrial collaboration, since there are a lot of investments brought back into this sector of the international economy.
The chairman of the meeting then decided to concentrate on what everyone in the oil and gas industry was interested the most – a chance to further extend cuts in oil production rates.
The Russian President mentioned that what they had done along with OPEC was advantageous to all of the global economy. He added that they will depend on how the development of this situation in the global market, no matter if there is going to be an extension of these deals or not, and that he did not rule it out; however, they would carry on based on the situation that will take place in March 2018.
When the chairman asked him to comment on the duration of the possible prolongation, President laughed: “I am telling him we don’t know yet if there will be an extension or not, and he is already asking me about its duration. We will define the terms and conditions when we decide if we are going to extend or not. But as a whole, if we talk about a possible prolongation, then it will be at least till late 2018.”
In a last month report, JMMC (Joint OPEC and Non-OPEC Ministerial Monitoring Committee), that monitors compliance levels of the OPEC and Non-OPEC nations that made a commitment to keep production rates at low levels, reported that the OPEC and non-OPEC oil producing countries, in August 2017, showed “an excellent conformity level” equal to 116%, which is the highest figure since the effective date of the Declaration of Cooperation.
Back in December 2016, thirteen (now fourteen) OPEC countries collaborated with eleven (now ten) non-OPEC oil-producing countries in their joint effort to speed up the stabilization of the international oil market by voluntarily cutting total production of oil by approximately 1.8 mln BOPD.
The report says that there are additional 170 mln barrels of oil overhang to be depleted.