Russia Determined to Ease Cuts From July in Line With OPEC+ Plan

Russia is determined to start easing oil-output cuts in July, sticking to the terms of the OPEC+ deal reached in April, according to people familiar with the key producer’s position.

OPEC and its partners struck a historic accord last month to slash supply as the coronavirus pandemic savaged demand. They agreed the cuts would taper from July. But Saudi Arabia has since sought to prop up the market with extra cuts and Gulf allies have followed suit. As OPEC+ prepares to meet in two weeks’ time, members are weighing up whether to extend the curbs or ease them.

Three Russian officials and two people in the industry, speaking on condition of anonymity, said the nation’s position is to stick to the plan. Kremlin spokesman Dmitry Peskov told reporters on Tuesday the deal is “undoubtedly successful,” and said countries will look at how the situation develops before taking a decision at the June 9-10 meeting.

The April agreement, which marked the end of a price war between Moscow and Riyadh, helped to reduce the global glut and bolster the market. Brent crude traded around $35.70 a barrel on Wednesday in London, more than 70% higher than a month ago, as the easing of virus lockdowns around the world slowly lifts demand. But prices at these levels still weigh on Russia’s budget.

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