International cooperation on crude production has helped stabilize oil markets and is important now more than ever, Russian Energy Minister Alexander Novak said on Monday.
The Organization of the Petroleum Exporting Countries (OPEC) and other leading oil producers had agreed to cut their combined oil output, but that deal expires at the end of this month.
Talks on whether to extend the deal are scheduled for July 1-2 in Vienna.
“Today, more than ever, international cooperation is important,” Novak said in a speech at an energy forum in the Russian city of St. Petersburg.
“There is a good example of successful cooperation on balancing the oil market between OPEC and non-OPEC countries,” he said.
“Thanks to joint efforts, we today see a stabilization of world oil markets, an increase in the investment attractiveness of the sector and the return of investment.”
Novak also said rivalry on global markets was heating up. “At the same time, we are encountering wider use of non-economic methods in the battle for consumers,” he remarked.
Russian officials have accused Washington of using tariffs and sanctions to try to carve out market share for its energy exports.
When asked about an extension of the deal between OPEC and non-OPEC oil producers to the second half of the year, he replied: “It’s too early to say.”
“We need to wait for, among other things, the G20 heads of state meeting. Let’s see what questions they discuss there, how the economy develops and the situation on the market,” Novak told reporters.
He said on the sidelines of the forum that consumption of oil in the third and fourth quarters are hard to predict, adding that his ministry is discussing the future of the oil deal with Russian energy companies.
Kazakh Energy Minister Kanat Bozumbayev said talks between OPEC and its allies next month about whether to extend their pact on cutting oil supplies “won’t be easy” and may be complicated by the situation facing Iran and Venezuela.
He said Iran and Venezuela both faced US sanctions, wondering whether they will want to extend. “It’s hard to say,” he added.
Kazakhstan wanted the deal extended into the second half of the year, he noted, describing the oil price in a range of $60-$70 per barrel as “suitable.”
Meanwhile, International Energy Agency (IEA) Executive Director Fatih Birol said the agency is very concerned about the impact that tensions in the Middle East may have on global energy security.
“We are monitoring the situation very closely and are very worried. In case of physical disruption, we are ready to act in an appropriate way,” Birol told a news conference at the IEA’s annual energy efficiency conference in Dublin.
Strong growth in the price of US shale oil has also contained stronger increases, he added.
