Russia would prefer its partners of the OPEC+ group to leave oil production unchanged when it meets next week, as Moscow is okay with the current oil prices and production quotas, sources with knowledge of the Russian position told Reuters on Friday.
OPEC+, which will hold a meeting on June 4, surprised the market a day ahead of the previous meeting in early April after several major OPEC+ producers, including Saudi Arabia and the United Arab Emirates (UAE), said they would collectively cut more than 1 million barrels per day (bpd) from their production between May and December as “a precautionary measure aimed at supporting the stability of the oil market.”
Russia also announced that its 500,000 bpd cut, initially for March and April, would now extend to the end of this year, making the total new cuts from OPEC+ as much as 1.6 million bpd.
Russia, however, is widely believed not to be cutting output as pledged.
“By our estimates, Moscow did not deliver its announced 500 kb/d supply cut in full. Indeed, Russia may be boosting volumes to make up for lost revenue,” the International Energy Agency (IEA) said in its closely-watched Oil Market Report last week.
But Russia, via its Deputy Prime Minister Alexander Novak, hinted yesterday he did not expect any change in policies at the next OPEC+ meeting.
Earlier this week, Saudi Arabia’s Energy Minister, Prince Abdulaziz bin Salman, warned traders—again—against shorting oil futures, less than two weeks before the OPEC+ meeting on June 4.
“I keep advising them that they will be ouching — they did ouch in April,” Abdulaziz bin Salman said on Tuesday.
“I would just tell them: Watch out!”
Ed Moya, senior market analyst at OANDA, commented on the contradicting messages, “The Saudis were trying to talk up oil prices and dangle a threat of more production cuts, but it looks like Russia won’t be on board for additional cuts.”