Russia's Putin: rollover on oil output curbs possible

MOSCOW (Reuters) - Russian President Vladimir Putin said on Thursday that Russia saw no need for now for global oil producers to change their existing deal on global supply, but did not rule out extending deep oil cuts for longer if market conditions warranted.

Russia's President Vladimir Putin speaks at a meeting of the Valdai Discussion Club via a video conference call at the Novo-Ogaryovo state residence outside Moscow, Russia October 22, 2020. Sputnik/Alexei Druzhinin/Kremlin via REUTERS

His comments are the clearest signal yet from Russia, one of the world’s top oil producers, that it is ready to continue with unprecedented output cuts in the face of a sluggish oil market beset by the coronavirus pandemic and overproduction.

Russia is working with OPEC and other oil producing allies, in a group called OPEC+, to limit oil supplies to drain a glut in the market caused when global demand slumped due to coronavirus lockdowns. The producers are reducing combined production by 7.7 million barrels per day (bpd).

OPEC+ is scheduled to relax those cuts by 2 million bpd in January, although some producers are concerned demand may not be strong enough to absorb the additional supply.

Putin said on Thursday he had been in contact with Saudi Arabia, OPEC’s top producer, as well as the United States. The United States is not part of the OPEC+ group.

“We believe there is no need to change anything in our agreements, we will closely watch how the market is recovering. Consumption is on the rise.

“However, we do not rule out that we could keep existing restrictions on production, and not remove them as quickly as we had planned to do earlier,” Putin told a meeting of the Valdai Discussion Club.

“If need be, maybe, we can take other decisions on further reductions. But we don’t see such a necessity now,” he added.

Russian Energy Minister Alexander Novak said earlier this week the global oil market recovery had slowed due to the second wave of the coronavirus outbreak, while it was premature to discuss a possible output-cuts rollover into 2021.

Industry sources told Reuters that Russia may support the move to extend the existing cuts beyond December.

OPEC+ oil ministers are scheduled to hold an online conference on Dec. 1 to discuss supply policy.

“Russia is interested neither in an (oil) prices jump, nor in their fall. And in that case, our interests coincide with that of the American partners,” Putin said.

Reporting by Darya Korsunskaya Gabrielle Tétrault-Farber; Editing by Andrew Osborn, Simon Webb and Rosalba O’Brien