MOSCOW/DUBAI (Reuters) - Russia and Saudi Arabia have a general consensus that the OPEC+ format should be “institutionalized” and extended until 2019 and beyond for oil market monitoring and joint action in case of need, Russia’s energy ministry said in a statement on Friday.
Citing Russian Minister Alexander Novak, the ministry added that the two major oil producers planned to sign a mutual agreement which will draw their cooperation in the energy arena to a new level.
Russia, the world’s top crude oil producer, and Saudi Arabia, the driver of OPEC policy and the third-largest crude producer behind the United States, agreed with OPEC and non-OPEC nations to cut supply by 1.8 million barrels per day since 2017.
A Gulf source familiar with Saudi oil thinking said the meeting of the Organization of the Petroleum Exporting Countries and other major producers in Vienna on June 22 “will look into a number of options” to guarantee oil market rebalancing.
“Any action will happen after all the consultation and agreement of the 24 countries,” the source told Reuters.
“Saudi Arabia and Russia acknowledge the hard work that has been done over the past year and a half along with members of the declaration of cooperation and plan to continue having that cooperation and institutionalizing it to a permanent framework,” the source said.
Inventories have since dwindled the deal, taking global benchmark Brent crude futures LCOc1 to $80 a barrel in late May, near a four-year high.
In recent weeks, both Russia and Saudi Arabia have started to raise production, in part after complaints from U.S. President Donald Trump about high prices. Brent fell to near $73 on Friday, a five-week low.
Saudi Arabia plans to host a leaders’ oil summit later this year for OPEC and non-OPEC countries in the deal to cut supply, two sources familiar with the matter told Reuters earlier on Friday.
An OPEC source described the summit as an idea which would be developed into a proposal, and a second source said it would be discussed in Vienna, where the deal will be reviewed.
Riyadh and Moscow took the first step in institutionalizing the long-term framework for co-operation between OPEC and non-OPEC nations this week, the sources said.
Saudi Crown Prince Mohammed bin Salman met President Vladimir Putin at the Kremlin this week. Russia defeated Saudi Arabia in the opening match of the soccer World Cup, which Russia is hosting.
The two countries plan to strengthen their relationship with investment throughout the energy sector and sharing of technology, the Gulf source said.
Reporting by Rania El Gamal and Olesya Astakhova; additional reporting by Alex Lawler; writing by Polina Devitt and Alex Lawler; Editing by Marguerita Choy and David Gaffen