Russia remains reluctant to additional cuts proposed by the Organization of Petroleum Exporting Countries and its allies as a response to the increasing fear over the novel coronavirus. OPEC+ officials have recommended additional oil production cuts of 600,000 BPD, but Russia asked for more to time to consider the proposal, sources told Reuters.
“The recommendation is for a cut of 600,000 BPD. Russia has asked for more time for consultations,” one of the Reuters sources said.
In a report published by Bloomberg, sources present during the OPEC+ meeting said that while Russia is opposed to imposing additional production cuts, it is was not against the extension of current ones.
Analysts believe that Russia’s position on additional cuts is not surprising at all. The country has been known consistently budgeting for lower oil prices than the actual ones since the 2014 price collapse. This strategy makes Moscow more resilient price drops than Riyadh.
“If it were intractable, they would have left by now,” R.B.C. Capital’s Helima Croft told Bloomberg. “It’s a quest for consensus still. But certainly, it shows that this is not easy.”
The meeting held in Vienna, which was initially scheduled in March, was called as an emergency response to the growing number of infected individuals by the 2019 novel coronavirus. Talks regarding the meeting have been confirmed by Russian Energy Minister Alexander Novak. During that time, he said that they still need a little more time to observe the situation and determine their next move.
“If you’re going to meet early, then you had to do something,” said Helima Croft, head of global commodities research at R.B.C., last week. “I don’t think you would call an early meeting just to roll it over.”
