Cairo – After the success achieved by the Organization of the Petroleum Exporting Countries (OPEC) in cutting down oil output, Saudi Arabia told OPEC officials it wants to continue output cuts for an additional six months – however with every oil agreement, light is shed on Saudi Arabia first, then Russia.
Reuters reported from sources in OPEC in March that the organization is considering extending the output cut agreement and that most members, including Kuwait and Saudi Arabia, approve as long as all producers, including non-members, agree.
Russia hopes to extend the agreement in order to achieve more gains, but has concerns over the return of shale oil in huge amounts.
“By the end of April we will reach 300,000 barrels per day cuts,” said the Russian Energy Minister Alexander Novak.
OPEC limited oil output deeper than pledged in March and the oil reserves dropped in February – a sign of the remarkable success in getting rid of excess supply.
However, OPEC expressed concerns over increasing supplies of the non-member OPEC countries in 2017, amidst budget challenges most of them face. It also voiced concern that the recovery of prices encourages shale oil companies to return to the competition, which harms OPEC efforts in reducing the supply.
OPEC reduced its output to around 1.2 million barrels per day from the beginning of January and for six months – the first curb in eight years – to get rid of excess supply. Russia and ten other producers that are not members in OPEC have agreed on reducing output by half that quantity.