An informed source said, on Tuesday, that Russia will likely propose that the “OPEC Plus” group reduce production by about one million barrels of oil per day, during the next meeting in October.
The meeting takes place on the fifth of October, against the backdrop of low oil prices and severe market volatility for months, which prompted Saudi Arabia, another major producer in OPEC Plus, to say that the organization may reduce production.
Four sources from OPEC Plus told Archyde.com that discussions between the ministers did not start before next week’s meeting.
The OPEC Plus alliance, which includes the Organization of the Petroleum Exporting Countries (OPEC) and allies such as Russia, has refused to raise production to lower oil prices despite pressure from major consumers, including the United States, to help the global economy.
However, prices fell sharply this month on concerns about the global economy and the strengthening of the dollar after the Federal Reserve (US Central Bank) raised interest rates.
Brent crude prices, which had already risen during trading on Tuesday, due to supply cuts from the United States and the Gulf, rose further on news of the possible Russian proposal, approaching a 4 percent increase to $87.15 a barrel.
The inability of many members of the group to produce in accordance with the agreed goals is likely to mitigate the impact of any OPEC Plus agreement on reducing production.
And OPEC Plus was producing less than its goals in August, by about 3.58 million barrels per day, at a time when members are suffering from sanctions and a lack of investment.
And the Iraqi Oil Minister, Ihsan Abdul-Jabbar, said on Monday that the Opel Plus group monitors the state of oil prices and wants to achieve a balance in the markets.
And JP Morgan expressed earlier this month his belief that OPEC Plus may need to intervene by reducing up to one million barrels per day “to stop the decline in prices and reorganize the physical and paper markets that appear to be separate.”
Russia faces challenges in maintaining oil production due to Western sanctions on its energy and financial sectors after the invasion of Ukraine earlier this year, in what the Kremlin calls a special military operation.
Saudi Arabia has not condemned Moscow’s actions amid difficult relations with the administration of US President Joe Biden.
The Kremlin said that Russian President Vladimir Putin and Saudi Crown Prince Mohammed bin Salman spoke last week and praised the efforts made within the framework of OPEC Plus, and confirmed their determination to abide by existing agreements.