Putin says oil cuts with OPEC could last to end of 2018

Reuters  |  MOSCOW 

By Vladimir Soldatkin, Katya Golubkova and Jack Stubbs

MOSCOW (Reuters) - Russian President said on Wednesday a deal between and rival producers to reduce production could be extended to the end of 2018, a longer timeframe than others have suggested, in a bid to curb a supply glut.

The pact between the Organization of the Petroleum Exporting Countries, Russia and other producers on cutting output by about 1.8 million barrels per day (bpd) is now due to expire in March.

"Everyone is interested in a stable market. What we did with OPEC, I believe, is beneficial for all the global economy," Putin told an energy forum in Moscow attended by several ministers.

"When we decide on whether to extend or not, we will decide on the timeframe. But on the whole, if speaking about a possible extension, this should be at least until the end of 2018."

The Russian president's comments raise the prospect of a longer than others have mentioned. Saudi Energy Minister Khalid al-Falih and other ministers have suggested prolonging the deal by months but not until the end of 2018.

The participants are showing more confidence that the supply cuts, which began in January, are starting to erode a glut. With help also from rising demand, last week reached almost $60 a barrel, its highest in more than two years.

Putin said he expected the world market soon to be balanced. Oil, which began to slide from more than $100 in mid-2014 due to excess supply, was trading just below $56 on Wednesday.

ministers attending the Moscow event said they were considering extending the deal or making a deeper cut. The accord has already been extended once at OPEC's last meeting in May, but producers have so far balked at a larger cut.

"It depends on a collective decision and consensus within OPEC, but I think there is no objection against this proposal," Iranian Minister Bijan Zanganeh told when asked whether there were talks on deepening or extending the cut.

Asked to specify whether he meant no objection to deeper cuts, he replied: "Yes. I'm discussing."

Venezuela's minister, Eulogio del Pino, also said there were discussions on whether to cut further or extend the deal.

Any move would also require the support of OPEC's de facto leader Saudi Arabia. Falih said in July that an of the agreement would most likely be needed into the second quarter of 2018 as a minimum.

has been urging other producers to join the supply pact but has yet to secure pledges to do so. Del Pino said an extra 10 to 12 producing countries in South America and Africa had been invited to participate.

(Reporting by Vladimir Soldatkin, Katya Golubkova and Jack Stubbs; Additional reporting by Olesya Astakhova and Darya Korsunskaya; Writing by Alex Lawler; Editing by Dale Hudson and Edmund Blair)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Wed, October 04 2017. 18:52 IST