President Vladimir Putin said Russia is open to extending a deal with OPEC to curb oil supplies to the end of 2018, though he\u2019ll wait to make a decision until nearer the expiry of the existing pact in March.<\/p>\n
The comments are the strongest signal yet that the Kremlin is willing to redouble efforts to lift global energy prices, coming as Putin prepares to welcome King Salman Bin Abdulaziz of Saudi Arabia to Russia for the first time this week. OPEC Secretary-General Mohammad Barkindo called them a \u201cvery strong endorsement\u201d of the deal.<\/p>\n
\u201cBased on the realities in March 2018, we will make our decision, but I do not rule out that we may extend\u201d the agreement, Putin said at the Russian Energy Week conference in Moscow on Wednesday. \u201cIf we speak about a possible extension, then of course, it should be at least until the end of 2018.\u201d<\/p>\n
Brent crude, the international benchmark, erased losses following Putin\u2019s comments, trading little changed at $55.94 a barrel at 2:31 p.m. in London.<\/p>\n
Russia, which relies on energy for more than a third of its budget revenue, reached a historic accord last year with the Organization of Petroleum Exporting Countries to cut production, hoping to eliminate a global oversupply. While the nation\u2019s economic growth accelerated to the fastest pace in almost five years in the second quarter amid recovery in crude prices, the supply glut has taken longer than expected to clear. Growing U.S. shale output means the market could return to surplus again next year if the producers were to reverse their curbs.<\/p>\n
Options Open<\/strong><\/p>\n \u201cPutin keeps all options on the table,\u201d showing Russia is willing to extend even if nothing has been decided, said Giovanni Staunovo, an analyst at UBS Group AG in Zurich. \u201cThe collaboration between Russia and OPEC continues, despite all fears that it could break down. It seems that all believe that sticking to the deal will be an advantage.\u201d<\/p>\n Oil is back in a bull market, fuel stockpiles are shrinking and demand for OPEC\u2019s crude is likely to increase in 2018. Even so, the group\u2019s own forecasts indicate that reversing the cuts when they expire at the end of March could potentially tip the market back into surplus due to supply growth elsewhere.<\/p>\n Russia\u2019s budget revenue from oil and gas taxes, which earlier this year recovered to 2015 levels, fell again by July on crude-price fluctuations and a stronger ruble. While oil prices have since returned to a bull market, risks remain and crude could fall as low as $40 a barrel next year, according to the nation\u2019s central bank.<\/p>\n OPEC and its allies have already discussed prolonging their deal well into the second half of 2018, people familiar with the matter said last month. Russian Energy Minister Alexander Novak last month signaled willingness to extend the cuts if needed, while also making clear the commitment wasn\u2019t open-ended.<\/p>\n March Decision<\/strong><\/p>\n \u201cWe\u2019ll have to see how the global energy balance looks in March 2018,\u201d Putin said. \u201cWe are in contact with our key partners and with OPEC as a whole, and with major producers.\u201d<\/p>\n The outlook for oil is much brighter than it was a year ago, with fuel stockpiles on course to return to the five-year average after a long period of surplus, OPEC\u2019s Barkindo said. However, even when equilibrium is restored to the market, major producers will need to keep working together, he said.<\/p>\n \u201cWe are looking beyond the rebalancing of this market, to further institutionalize this strategic partnership between OPEC and non-OPEC, through the Russian Federation,\u201d Barkindo said. \u201cWe\u2019ll be able to sustain the issue of cooperation beyond the issue of supply and demand and stocks, to begin to address issues like investments.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":" President Vladimir Putin said Russia is open to extending a deal with OPEC to curb […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-554","post","type-post","status-publish","format-standard","hentry","category-news"],"yoast_head":"\n