Paris — The pact between OPEC, Russia and its allies is "here to stay," a longtime adviser at Saudi Arabia's energy ministry said Friday, playing down concerns that the alliance could end given Russia's lukewarm comments around the ongoing market management.
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"Cooperation will continue between Russia and Saudi Arabia," Ibrahim al-Muhanna said at the International Oil Summit in Paris, stressing that "it is the core of OPEC+ cooperation."
OPEC, Russia and nine other non-OPEC partners are in the midst of a 1.2 million b/d production cut that has helped oil prices recover from a massive slump in the last three months of 2018. The cut agreement is scheduled to run through June, and the coalition is divided on whether it should be extended.
Russia has questioned the benefits of the loss of market share in exchange for higher oil prices, where Brent crude has rise from $50/b at the end of 2018 to above $70/b in recent weeks.
A nine-country monitoring committee co-chaired by the coalition's two largest members -- Saudi Arabia, which wants to extend the cuts, and Russia, which is more circumspect -- is scheduled to meet May 19 to review market conditions. The full 24-country bloc will meet June 25-26 in Vienna to decide on the agreement's future.
OPEC canceled a meeting in April amid greater comfort over oil prices and with the market still not deemed to be back in balance.
The Saudi adviser also said that the alliance was "careful not to make the same mistakes as last year" and was taking a "policy of wait and see", after Saudi Arabia and Russia were wrong-footed by the US stance on Iran sanctions.
Saudi Arabia and Russia were producing at record highs of above 11 million b/d in November to offset the risk of a supply shortage due to Iran, only for the US to grant waivers to key consumers such as India and China. These waivers are up for review in May.
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