Russia rejects oil output cuts proposed by OPEC: reports

February 6, 2020
| Report Focus News

Russia on Thursday rejected proposals to slash crude output at an OPEC+ meeting, media reported, and asked for more time to assess the impact of a new coronavirus on crude prices.

Delegates of the Organization of the Petroleum Exporting Countries and non-member Russia — together known as OPEC+ — have been in a “joint technical committee” meeting in Vienna this week to discuss cutting production, amid fears of the coronavirus situation in oil consumer China affecting the market.

The talks began on Tuesday but collapsed Thursday as Russia rejected a proposal by Saudi Arabia to cut output by 600,000 barrels a day, the Wall Street Journal reported.

Russia has asked to resume consultations but the format and time is not clear, TASS agency reported, citing an unnamed source.

Energy minister Alexander Novak was quoted as saying earlier in the day by Russian agencies that Moscow was not yet ready to formulate a position.

“I cannot say what we are ready or not ready for without understanding the situation clearly and having clear prognoses on the development of the coronavirus situation,” he said.

“We would need additional time to see how the situation develops, what kind of influence it will have on the global markets and on oil,” he added.

Two-thirds of China’s crude imports come from OPEC and Russia.

Earlier this week Iraq’s oil ministry spokesman Assem Jihad said any cuts would have to be announced at the OPEC ministerial meeting which may be moved from March to February.

Russia exported 77.6 million tonnes of oil to China in 2019, more than the previous year but second to Saudi Arabia.

OPEC and Russia in December agreed to cut production by 500,000 barrels per day in 2020, lowering output from October 2018 levels by 1.7 million barrels per day.