Russia, Saudi Arabia agree to extend OPEC output deal

Russian President Vladimir Putin has said that an oil output cap deal agreed with Saudi Arabia and OPEC will be extended by six to nine months.

MENA

2 min read

The New Arab & agencies

30 June, 2019

Putin announced the extension after meeting with Saudi Crown Prince Mohammed bin Salman [AFP]

Russia and Saudi Arabia have agreed to extend a deal with the world's largst cartel of oil producing nations to extend a production output cap, Russian President Vladimir Putin said.

The announcement comes as oil prices struggle amid a slowing global economy and increasing US supplies of the commodity.

Speaking to reporters after talks with Saudi Crown Prince Mohammed bin Salman on the sidelines of the G20 in Osaka, Putin said the current deal would be extended, without changing output volumes.

"We will support the extension, both Russia and Saudi Arabia. As far as the length of the extension is concerned, we have yet to decide whether it will be six or nine months. Maybe it will be nine months," said Putin.

Saudi Energy Minister Khalid al-Falih also said that the deal, which expires on Sunday, will likely be extended by nine months.

The Organization of the Petroleum Exporting Countries, Russia and other producers, an oil producers' alliance known as OPEC+, will meet next week to discuss the deal.

The pact is not backed by the United States, which is currently the world's largest oil producer.

The OPEC plus Russia production agreement has helped rescue low oil prices, which collapsed to around $30 a barrel in 2016.

The agreement between Russia and Saudi Arabia - two of the world's biggest oil producers - helped strengthen relations between the two countries, which previously had a relatively frosty relationship.

Oil prices have also risen due to tough US sanctions on Tehran, with President Donald Trump saying he wanted to reduce Tehran's oil exports "to zero".

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