OPEC, Russia Meet to Extend Record Oil Cuts, Push for Compliance

OPEC and its allies led by Russia meet on Saturday to approve extending record oil production cuts and to push countries such as Iraq and Nigeria to comply better with existing curbs, Reuters reported.

The producers known as OPEC+ previously agreed to cut supply by a record 9.7 million barrels per day (bpd) during May-June to prop up prices that collapsed due to the coronavirus crisis. Cuts have been due to taper to 7.7 million bpd from July to December.

OPEC+ sources have said Saudi Arabia and Russia had agreed to extend record cuts throughout July although Riyadh would prefer to see cut extended throughout August.

Global benchmark Brent crude LCOc1, which slumped below $20 a barrel in April, rose nearly 6% on Friday to trade at a three-month high above $42.

Saturday’s video conferences will start with talks between members of the Organization of the Petroleum Exporting Countries at 1200 GMT, followed by a gathering of the OPEC+ group at 1400 GMT, OPEC said on Friday.

OPEC sources said an extension of cuts was contingent on compliance as countries that produced above their quota in May and June must compensate by cutting more in future months.

Iraq, which had one of the worst compliance rates in May, according to a Reuters survey, agreed to additional cuts, OPEC sources said.

It was not clear how exactly Iraq would cut output and agree with oil majors working in the country to curtail production. Nigeria said it would also aim to reach full compliance.

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