By Tyler Durden
Authored by Zainab Calcuttawala via OilPrice.com,
Russia may be on its way out of the OPEC output reduction deal, according to the country’s Energy Minister, Alexander Novak.
Reuters reports that Novak might discuss the country’s potential exit from the pact in Oman next week. Russia had vowed to cut output by 300,000 barrels per day under the agreement as part of a group of non-OPEC producers who elected to coordinate the bloc’s market stabilization initiative.
“We see that the market is becoming balanced. We see that the market surplus is decreasing, but the market is not completely balanced yet and, of course, we need to continue monitoring the situation,” Novak said. Russian oil majors have been complaining about the deal and how it is creating stumbling blocks on the road towards the industry’s expansion plans.
Brent barrel prices are currently approaching $70 a barrel, suggesting crude markets are rebalancing as we approach June, when the deal is set for “review” – a process with little description in the full text of the OPEC deal’s renewal, which was agreed upon in November.
As far as OPEC members are concerned, the deal could carry on beyond the end of 2018.