Russia supports OPEC production freeze and cuts

By Peter Stewart 26 October 2016
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Khalid al-Falih, president and chief executive of Aramco, met Russian Energy Minister Alexander Novak at the weekend. (World Energy Congress) Khalid al-Falih, president and chief executive of Aramco, met Russian Energy Minister Alexander Novak at the weekend. (World Energy Congress)

A flurry of activity took place between Russia and other countries over the weekend, hinting that moves may be underway to stabilise the oil market. Russian Energy Minister Alexander Novak met his Saudi Arabian counterpart Khalid al-Falih, then flew on for talks at the OPEC Secretariat in Vienna. Novak also held a meeting on 25 October in Moscow with Venezuelan Oil Minister Eulogio del Pino, who also met Igor Sechin, chief executive of Russian oil producer Rosneft.

All three meetings suggest joint action by OPEC and non-OPEC countries to stabilise the oil market, although concrete details are lacking on the level of any planned output freeze or production cuts. OPEC countries reached a tentative agreement at a meeting in Algiers on 28 September to reduce oil production by as much as 700,000 barrels per day, to 32.5-33.0 million barrels per day (MMb/d). Russia later lent its support to the initiative, but several OPEC countries have sought to exempt themselves, including Iraq, Nigeria and Libya.

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