OPEC+ Abolishes Oil Output Restrictions as No Consensus Reached on Market Situation - Novak

© REUTERS / Heinz-Peter Bader/File PhotoA flag with the Organization of the Petroleum Exporting Countries (OPEC) logo is seen before a news conference at OPEC's headquarters in Vienna, Austria, December 10, 2016
A flag with the Organization of the Petroleum Exporting Countries (OPEC) logo is seen before a news conference at OPEC's headquarters in Vienna, Austria, December 10, 2016 - Sputnik International
VIENNA (Sputnik) - The OPEC+ has decided to abolish the oil production restrictions as no consensus has been reached between the 24 countries on the current situation in the market, Russian Energy Minister Alexander Novak has stated.
"This decision has been made, since we have not arrived at a consensus on how the 24 countries should behave simultaneously, taking into consideration the existing situation", Novak said on Friday, leaving the OPEC headquarters in Vienna after the OPEC+ talks.. 

"This is why, I believe, we are coming to a moment when, starting April 1, we will work without considering the previously active quotas and cuts. However, this certainly does not mean that every country will not analyze the situation developing in the market", the minister added.

Novak continued on by saying that the OPEC+ will continue working as outlined in the long-term cooperation charter, and no country has any obligation on oil production cuts starting 1 April.

"We have just signed a document saying we will continue cooperation within the framework of the charter. As for the cuts, I believe that, taking into consideration the decision that was made today, starting April 1 of this year none of the OPEC and non-OPEC countries has any obligations", Novak told reporters.

Russia's oil output increase will now depend on companies' plans, but no negotiations have been held between the companies and the Energy Ministry so far, the minister went on to say.

"This will, most importantly, depend on companies' plans. We will need to discuss this with companies, as we have not discussed such an option", Novak said, asked about Russia's possible oil output increase.

The sharp fall in oil prices at the OPEC+ decision to abolish production restrictions under the oil cut deal could be an emotional assessment, there are too many speculative factors on the market at present, the minister said.

"Let's see how the market reacts, it is very volatile. Maybe it is an emotional assessment today. I can’t speak for the market, because there are too many speculative factors among other reasons", Novak noted.

Oil prices accelerated their fall to 8.5 percent on the OPEC+ oil cut deal news, as the Brent crude fell below $46 per barrel for the first time since June 2017.

OPEC Cannot Cut Down Oil Output Without Russia, New Meeting Needed

OPEC needs Russia’s consent to cut down oil production, Iranian Oil Minister Bijan Namdar Zangeneh said on Friday, adding that the organisation should conduct another meeting to reach consensus.

"I believe that it is necessary that we have another meeting or consultation to decide because in this situation market needs a decision on cuts", Zangeneh said.

The oil minister also said that OPEC could not make a decision on cutting oil production without Russia’s consent.

“There is no deal. And there is no 'Plan B'", Oman delegate Ali Riyami told reporters following the OPEC+ emergency meeting on current market situation amid novel coronavirus outbreak worldwide.

A banner gives safety instructions to advise people how to protect against a coronavirus infetion at the foyer of the OPEC building before the 178th meeting of the Organization of Petroleum Exporting Countries (OPEC) in Vienna, Austria, on March 5, 2020 - Sputnik International
OPEC Recommends Extending 1.5 Mln Bpd Extra Oil Production Cut to 2020 End
The negotiations between OPEC+ members on Friday focused on the need to further decrease oil production amid the outbreak of the coronavirus, officially known as COVID-19.

According to the sources from the Russian delegation, Moscow preferred to keep current agreements in place and monitor the situation with COVID-19.

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