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Oil Output: Putin, Saudi Crown Prince Agree on Further Coordination

Saudi crown prince and Russian president discuss global oil markets

Dubai- Masaader News

Russian President Vladimir Putin and Saudi Crown Prince Mohammed bin Salman agreed during a telephone call on further “close coordination” on oil output restrictions.

The Kremlin said on Wednesday, just two weeks before an online oil conference, according to Reuters.

OPEC+

It said they also both noted the importance of joint efforts aimed at reaching the agreements within the OPEC+ group in April on oil production curbs.

“It was agreed upon further close cooperation on this topic via the energy ministries,” the Kremlin said in a statement.

The Organization of the Petroleum Exporting Countries and other large oil producers led by Russia agreed last month .

To cut their combined oil output by almost 10 million barrels per day in May and June to tackle the sluggish oil market.

The OPEC+ group is due to hold an online conference in the second week of June to discuss their further policy.

According to the current deal, the output curbs should be eased starting in July.

Also, Various sources have said there are discussions on whether to continue with the current level of production cuts from July onwards.

Oil Producers

Oil producers can cut this amount of oil production in a matter of less than an hour, the head of Zarubezhneft told RIA Novosti recently.

All they need to do is adjust the flow of oil at a 2-3 percent lower rate. Another executive chimed in as well: to reduce production substantially, it is enough to reduce maintenance drilling, Transneft’s president Nikolay Tokarev said. Production in Western Siberia has been declining for years, which has necessitated drilling operations aimed at maintaining a certain rate of production. Cut that drilling, and you cut production.

As usual, the truth is in the middle. Shutting in an oil well in Siberia in December  be a little bit more difficult than shutting an oil well in Saudi Arabia or Texas.

 

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