Vladimir Putin and Saudi Crown Prince Mohammed Bin Salman

Russia and Saudi Arabia agreed to extend the maximum level of production within the OPEC+ by at least one month. Future plans will depend on the market situation, a source participating in the negotiations told TASS.

“We have agreed that it is necessary to extend it for at least a month. Then we will look at the situation,” the source said. The countries’ ministries have not officially commented on the information.

The source added that energy ministers of Russia and Saudi Arabia are in constant contact and have “a mutual understanding.” At the same time, according to the source, they were not satisfied with the data on May cuts in a number of other countries. “Until the quota compliance problem is resolved, the meeting will not be scheduled,” the source said. Another source confirmed that only a technical meeting is scheduled for June 4, at which the parties 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. It was reported earlier that the parties would discuss further actions on the oil market.

The OPEC+ agreement came into force on May 1. It includes reduction in oil production by the alliance countries by 9.7 mln barrels per day during May-June. Russia and Saudi Arabia should reduce production by 2.5 mln barrels per day each from a level of 11 mln barrels. The remaining countries are reducing production from the level of October 2018.

The agreements will be valid for two years (until the end of April 2022), but from July to December 2020, the reduction will be 7.7 mln barrels per day and from January 2021 to April 2022 — 5.8 mln barrels. Parameters of the deal may be revised in December 2021.

Source: Eurasia Diary, June 3rd, 2020