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Moscow, Riyadh Agree to Jointly Support Extension of OPEC/Non-OPEC Deal

© REUTERS / Leonhard FoegerThe OPEC flag and the OPEC logo are seen before a news conference in Vienna, Austria, October 24, 2016
The OPEC flag and the OPEC logo are seen before a news conference in Vienna, Austria, October 24, 2016 - Sputnik International
DHAHRAN (Saudi Arabia) (Sputnik) - Russian President Vladimir Putin and Saudi Crown Prince Mohammed bin Salman Al Saud have agreed to jointly support an extension of the OPEC/non-OPEC oil output-cut deal, Russian Energy Minister Alexander Novak said on Saturday.

"I would like to remind that two days ago during the meeting between Saudi Crown Prince Mohammed bin Salman and President Putin a historic decision was made on the cooperation between our countries on prolongation of the OPEC+ [OPEC/non-OPEC] agreement on a termless basis," Novak told reporters.

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The minister pointed out that the issue would be discussed during the meeting of the parties to the deal in the Austrian capital of Vienna scheduled for June 23.

"We will discuss this issue [in Vienna]. They [parties to the agreement] have also given their preliminary consent to prolongation of the cooperation, the format must be agreed on," Novak said.

The minister added that the prolonged OPEC/non-OPEC agreement would contain no specific oil output volumes.

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"It [the deal] is likely to provide [parties to the deal] with an opportunity to decide [on changing the volumes of oil production] if needed," Novak added.

Novak also told journalists that Russia and Saudi Arabia will offer the parties to the oil output cut agreement between the OPEC and a number of non-cartel producers to raise production in the third quarter of 2018 by 1.5 million barrels per day, and then to take further decisions in September.

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"We propose to raise [output] in the third quarter by 1.5 [million barrels per day]…. We are talking about the fact that we are offering this only for the third quarter, and in September we need to look at the situation in the market and understand what to do next. In the third quarter, there will be an increase in demand, therefore such proposals are really appropriate," Novak said.

The decision to soften the deal should give all countries participating in it equal opportunities to increase production proportionally to their reduction quotas, Novak added.

"We need to give the same opportunities to everyone… It's fair to distribute this softening in proportion to the cut-off quotas," he said.

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