Russia and Saudi Arabia agree to extend cooperation into 2019

Russia and Saudi Arabia agree to extend cooperation into 2019
Russia and Saudi Arabia agree to extend cooperation into 2019
Russia and Saudi Arabia agreed to extend their cooperation to balance the oil market into 2019, but left the details of any supply cuts to be resolved in the coming days as OPEC and its allies prepare for their meetings in Vienna.

While the two countries haven’t officially confirmed fresh output cuts yet, the comments lay the groundwork for a deal at the Organization of Petroleum Exporting Countries meeting this week.

The OPEC advisory committee recommended a cut of 1.3 million barrels a day last week, but since then the group got an unexpected hand from Canada’s 325,000 barrels a day reduction.

Last month the cartel held its production steady as record oil output from Saudi Arabia helped offset losses due to U.S. sanctions on Iran. Following are the latest positions of most of OPEC, plus non-members Russia and Kazakhstan.

The respective shares of supply are based on October output. Estimates for the price each member needs to balance its 2018 budget are from the International Monetary Fund, unless otherwise specified.


Price needed: $105.70

Share of OPEC production: 3.5%

Algeria relies almost entirely on oil and gas revenue for hard currency and was one of the key architects of the production-cuts deal in 2016. Sonatrach’s chief executive has said an oil production cut of 1 million barrels a day is needed to stabilize prices and that he sees oil within a $70-80 a barrel range as right for consumers.



Price needed: $78 (RBC)

Share of OPEC production: 4.5%

Oil is the biggest source of revenue for Angola and the southwest African nation unveiled an 11.3 trillion kwanza ($36.4 billion) budget in October based on an oil price of $68 a barrel. Ruth Mendes, the chairwoman of the Economy and Finance Commission, said there was “general concern among lawmakers and government officials,” that crude prices had fallen below that level. The country’s crude loadings are expected to fall to the lowest in at least 10 years in January.



Price needed: $68.10

Share of OPEC production: 10%

Under renewed U.S. oil sanctions, Iran’s crude output fell 230,000 barrels a day last month to 3.09 million, according to a Bloomberg survey. Last month the country’s exports went to just two known locations: China and India, but that may change in December after some countries were unexpectedly granted waivers from U.S. sanctions.


Price needed: $54

Share of OPEC production: 14%


Iraq may be an obstacle to any coordinated oil production cut because of its relentless supply growth. It resumed pumping crude for export by pipeline from northern fields last month and is expanding capacity to produce at its main deposits in the south. Iraqi output could reach 6 million barrels a day by 2025, according to consultant Wood Mackenzie Ltd, up from 4.65 million in October.


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