Minister Says Russia Open to Relaxing OPEC+ Cuts

From easing the limits to ending the extreme throttling-back that has seen some countries exceed original cutback targets, Russia sees a range of options that would allow OPEC+ to continue output cooperation until the yearend.

"One of the options we discussed is removing the over-compliance, a return to the parameters of the current agreement," Russian Energy Minister Alexander Novak said in an interview with Bloomberg TV in Jeddah, Saudi Arabia, after a producer group meeting.

OPEC+ may need "to tweak the parameters to a certain extent" if monitoring shows full compliance is not enough to prevent a market deficit, he said.

As OPEC and its allies gathered over the weekend to discuss the future of the output-cuts pact, Russia was the only member of the group that did not rule out a relaxation of the cuts.

Most other nations including the de facto leader, Saudi Arabia, have signaled they prefer extending the current deal until year-end.

If Russia’s support to ease the restrictions strengthens over the next several weeks, OPEC+ may find it difficult to reach a consensus over extending the agreement at the ministerial meeting in June when the current deal expires.

Continuing the OPEC+ pact into the second half of the year with full compliance of all member states would allow for production increases.

In April, the group’s total average conformity with the deal reached 168%. Saudi Arabia alone could ramp production up by about 500,000 bpd without breaching its cap, as it has cut output deeper than required.