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Alexander Novak: Russia to consider withdrawal from oil cut deal after market rebalances

March 19, 2018/ 08:05

Moscow. Moscow will consider the possibility of withdrawing from the OPEC oil production cut deal after the global oil market rebalances, Russian Energy Minister Alexander Novak told Bloomberg TV on Monday, informs TASS.
Iranian Oil Minister Bijan Namdar Zanganeh said earlier that Russia could withdraw from the deal before the end of 2018.

"We believe that as soon as the ultimate goal is achieved, which is the balancing of the market, we will start considering gradual withdrawal or exit from this deal," Novak said. "Only after that further actions are to be considered and taken," he added.

According to the Russian energy minister, the market rebalancing "might start to happen starting from the third or fourth quarter" of 2018.

In late 2016, OPEC (the Organization of the Petroleum Exporting Countries) and 11 independent oil-exporting countries, including Russia, reached an agreement to reduce oil production. The purpose of the agreement is to reduce global oil reserves to five-year average levels.

According to the agreement, in the first half of 2017, the participants had to withdraw 1.8 mln barrels per day from the oil market as compared to the level recorded in October 2016. Russia pledged to reduce oil production by 300,000 barrels per day and reached the quota in May 2017, maintaining it since then.

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