Oil producers may extend production cuts for whole 2018
By Sara Israfilbayova
The Organization of the Petroleum Exporting Countries will gather in Vienna on May 25 to mull together with non-OPEC oil producers extension of the production cuts put in place in November as a way to shore up prices, which have been choppy this month.
Russia and Saudi Arabia has already announced that they are eager to extend oil production cuts through the first quarter of 2018. Following this announcement, a number of OPEC and non-OPEC producers began signaling support to the initiative.
Now the oil exporting countries are discussing the prolongation of the oil cut agreement for the entire 2018, said Noureddine Boutarfa, Algeria’s Energy Minister.
"We have many options, not only for nine months ahead, but the whole next year," he said.
"But the main proposal concerns the extension for nine months," Boutarfa said, adding that everything will depend on the data on oil reserves.
Ecuador Oil Minister Carlos Perez also confirmed that OPEC and other oil-producing countries would discuss a six- or nine-month extension to output cuts and probably choose the latter.
"Six and nine months are both proposals on the table ... we will support the majority, probably the nine months," Perez, whose country is in OPEC, told reporters after arriving in Vienna on Tuesday.
Saudi Energy Minister Khalid al-Falih earlier won support from OPEC's second-biggest and fastest-growing producer, Iraq, for a nine-month extension and said he expected no objections from anyone else.
Iraq’s Oil Minister Jabbar Al-Luaibi said almost all countries participating in the cut had agreed to extend it, though there was no consensus yet on how long the extension should be. “Some ministers say nine months, some ministers think six months,” al-Luaibi said.
Iran’s Oil Minister Bijan Namdar Zangeneh announced on May 24 that Iran agrees with the extension, but the negotiations are focused on the period of extension, Shana reported. The country was the only OPEC member allowed to increase its output under the supply cut deal.
Azerbaijan, whose participation in joint oil production cuts is defined at 35,000 barrels per day, also supports prolongation. Energy Minister Natig Aliyev underlined Azerbaijan’s readiness to further take steps for achieving stable oil prices.
The statements of top energy officials about prolongation pushed up the price of oil.
Today, the price for July futures of Brent crude oil has increased by 0.22 percent to $54.27 per barrel, meanwhile, the price for July futures of West Texas Intermediate (WTI) has grown by 0.17 percent and stood at $51.56 per barrel.
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