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Saudi and Russia show united front on OPEC+ strategy as Novak visits Riyadh

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Moscow — The OPEC+ group may prolong its current strategy to manage oil markets until the end of 2022 in order to keep speculators "on their toes", Saudi energy minister Prince Abdulaziz bin Salman and Russian deputy prime minister Alexander Novak said in a joint press conference Dec. 19.

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The show of unity between the grouping's largest producers came as Novak traveled to Riyadh for a rare in-person meeting with Prince Abdulaziz on the sidelines of Saudi-Russian bilateral discussions.

"The OPEC+ deal has been with us for almost nine months and will continue until April 2022, but it can be extended until the end of 2022," Prince Abdulaziz said, adding that market skeptics and speculators will remain "on their toes".

Both policymakers presented a united front just two weeks after the OPEC+ coalition held difficult talks, eventually agreeing to raise crude oil production by 500,000 b/d starting January and to make monthly decisions on further output hikes.

Saudi and Russia began 2020 at loggerheads over strategy in a dispute which threatened to collapse the OPEC+ alliance and tip global producers into a damaging price war before the COVID-19 pandemic hit global demand.

"So many countries participating in the meetings means there are many different views. Our cooperation will continue even if there's no need for any action," Novak said.

The next full OPEC+ meeting will take place on Jan. 4 and will be preceded by the Joint Ministerial Monitoring Committee, co-chaired by Saudi and Russia. The JMMC is responsible for tracking compliance with quotas and advises on policy.

"The market is still extremely fragile, and we have to keep monthly demand monitoring, as previously recovery was more stable. We must meet more frequently," Novak said.

Additionally, Russia and Saudi Arabia agreed on a new cooperation roadmap, which will be signed in the first half of 2021.

This will add to an existing list of 30 projects worth $2.5 billion, including 24 initiatives in oil, gas and nuclear energy.

"We have 74 new initiatives and we will show what we achieve at our next meeting at the end of March," Prince Abdulaziz said.

At present, the Russian-Saudi trade increased by 60% on the year despite the pandemic. The total volume should reach $5 billion by 2024, both sides added.