Russia, Saudi Arabia Reach Oil Output Agreement Ahead of OPEC Talks; The pact to cut crude exports could extend for six to nine months, Mr. Putin says

The Wall Street Journal, 29.06.2019

Russia and Saudi Arabia have agreed to extend a major oil output-cutting deal by six to nine months to help support the market, Russian President Vladimir Putin said Saturday after meeting Saudi Crown Prince Mohammed bin Salman.

The Organization of the Petroleum Exporting Countries and its Russia-led allies agreed to a six-month round of output cuts in December that lifted oil prices by as much as 22% by April. But recent Middle East tensions that threaten oil supplies have been offset by worries about the global economy, sending oil prices into a tailspin that is nearing a bear market.

"We have agreed that we will extend our deal," Mr. Putin said, cited by Russian news agency Interfax, after meeting the Saudi Crown Prince on the sidelines of the G-20 leaders' meeting in Osaka.

Mr. Putin said the length of the extension is up to discussion but it would be between six and nine months.

OPEC's 14 member-nations and a group of 10 oil-producing countries led by Russia are gathering Monday and Tuesday for a high-stakes meeting in Vienna to discuss the production deal. Some OPEC member nations expected to argue for deeper curbs than previously agreed, The Wall Street Journal has reported.

But Mr. Putin said Moscow and Riyadh support an extension at current volumes, which run at around 1.2 million barrels a day.

"In any case, we will support the extension of the agreement, both Russia and Saudi Arabia, in the amount approved earlier," Mr. Putin said.

Kirill Dmitriev, the chief executive of Russian Direct Investment Fund, said Saturday that Russia's agreements with OPEC in recent years have helped raise Russian budget revenue by more than 7 trillion rubles, or $111 billion.