Saudi Arabia warned Opec and allies outside the oil cartel against unleashing more barrels on to a fragile market, putting the kingdom at loggerheads with rival Russia. Prince Abdulaziz bin Salman, the kingdom’s oil minister, told officials from the 23member Opec+ group, which includes Russia, that joint efforts to restrict production and manage the sharp fall in demand due to the coronavirus pandemic had to be maintained.
Tensions have simmered for months about how quickly to restore supplies after the group last year cut more than 10 percent of global output, with Russia keen to raise production to protect its market share. On Monday, a virtual meeting of oil ministers was adjourned without a resolution between the two sides. Talks are due to continue on Tuesday as delegates hope to hammer out an agreement for production in February.
“Do not put at risk all that we have achieved for the sake of an instant, but an illusory, benefit,” Prince Abdulaziz said. “Our job is not yet done.” Alexander Novak, Russia’s deputy prime minister, told the conference the current rollout of vaccination programs would only “accelerate”. This, he said, might pave the way for a recovery in oil production.
Oil prices retreated from earlier highs as the ministerial meeting got underway and the split among producer nations was apparent. Brent crude eased to as low as $50.75 a barrel, a pullback from the nine-month high of $53-33 struck earlier in the day. West Texas Intermediate, the US marker, dipped as low as $48.05. Oil ministers from the Opec+ group face a complex outlook for crude demand, with the reopening of economies in some parts of the world but renewed lockdowns in others.