Cheaper gas is coming fast, folks. To make a serious dent in the oil glut and get oil prices back up, Saudi and Russia would need to jointly make cuts to production.
Russia has said it’s not interested in further production cuts:
Russia prefers to stay out of any fresh oil production cuts led by OPEC’s leader Saudi Arabia, Reuters reported on Thursday, quoting two high-ranking Russian sources.
Russia—which together with Saudi Arabia and some Arab Gulf producers has been raising production since June to offset Iranian losses—saw its oil production set a new post-Soviet record high of 11.41 million bpd in October, up from 11.36 million bpd in September.
However, Russia’s key partner in the production cut deal, Saudi Arabia, has expressed concern over the oil price slump in the past month. Saudi Energy Minister Khalid al-Falih said on Monday that based on the OPEC+ group technical analysis, “there will need to be a reduction of supply from October levels approaching a million barrels.”
While al-Falih reiterated that “we need to do whatever it takes to balance the market,” Russia’s official position is ‘wait and see’ and not to rush into hasty decisions. There is no need to take any action to halt the decline of oil prices that started a month ago, Russia’s Energy Minister Alexander Novak said earlier this week.
A senior Russian government source told Reuters that production in Russia shouldn’t be reduced, as Moscow has been growing its output and will continue to do so in the future.