On the eve of the OPEC+ meeting, opinions on the terms of the extension of the agreement were divided

Kazakhstan considers it necessary to extend the OPEC+ agreement on reducing oil production on current terms. This was announced on June 24 by the head of the Ministry of energy of Kazakhstan K. Bozumbayev during the 6th Forum of future leaders of the World oil Council in St. Petersburg, Russian media reported.
In particular, argues Bozumbayev, comfortable is the level of oil prices of 60-70 dollars. US per barrel, and further growth in oil prices will lead to an increase in oil production in the United States, which no one needs.
He also believes that it will not be easy to agree on an extension of the agreement because of the position of countries such as Iran and Venezuela, against which sanctions are being strengthened and it is unclear whether they will or will not want to extend the agreement. Although Iran and Venezuela are excluded from the agreement, they participate in OPEC+ and their volumes are taken into account in the overall balance sheet.
Head of the Ministry of energy of Azerbaijan P. Shahbazov agrees with his Kazakh counterpart. The Minister believes that based on the current situation, if there are no new factors, the OPEC+ agreement should be extended under the current conditions.
According to him, the OPEC+ agreement gave good results over the past period, and most importantly - that the market in the presence of this cooperation continued to remain, despite all the difficulties, balanced. This gives positive expectations for the future.
Shahbazov notes that the time of the OPEC+ meeting on July 1-2 was chosen very correctly, the OPEC+ countries will have the opportunity to analyze the last months, what was happening in the market, how the market reacted to economic and political events.
The agreement of OPEC and non-OPEC countries to reduce oil production is valid until the end of the 1st half of 2019. Its further fate, including the extension for the 2nd half of this year, will be determined at meetings on July 1-2 in Vienna.
Earlier, the head of the Ministry of energy of Saudi Arabia H. al-falih said that the majority of the parties to the agreement support its extension on the current terms.
Among Russian companies the attitude to the agreement is ambiguous. Rosneft has repeatedly stated that the restriction of oil production within OPEC+ in geostrategic terms is the surrender of markets and a voluntary concession to us control. LUKOIL also supports Russia's participation in OPEC+ on a permanent basis.

 

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