To continue or not to continue? Two questions ahead of Vienna OPEC meeting are still unresolved. When and how to end the curbs. However, OPEC members and Russia agree that the cuts are working and must continue.
As ministers gather in Vienna, this unanswered question is the main reason Russia has yet to give its formal assent to a rollover of their agreement until the end of next year, according to people familiar with the mater, Bloomberg reported. Moscow wants clarity about what comes afterward,
An exit strategy is shrouded with fog. “We will talk about it,” Kuwaiti Oil Minister Issam Almarzooq said Tuesday. The problem is that Russia wants a clear road map which 57-year old oil cartel could not provide. “We’re looking forward to getting everybody engaged in a robust discussion and we’ll come up with the right decision,” said Saudi Energy Minister Khalid Al-Falih in Tuesday.
Benchmark Brent oil prices traded at $63.30 a barrel in London today, 37 percent higher than a year ago. International Energy Agency sees demand for OPEC’s crude 1 million barrels a day lower than the cartel’s own analysis. According to Bloomberg, the disagreement is about the strength of future demand growth and the speed of the expansion in U.S. shale output.
Russia´s economic policy making is more complex than Gulf states can imagine. Kremlin is demanding clear exit strategy and a Schedule of how the cuts will end. So it can guide privately-owned Russian oil companies, writes Bloomberg, and their foreign partners about future output, the people said, asking not to be named because the talks are private. Most OPEC members have a single national oil company that answers to the government.