An extension to the oil production cuts will not be necessary if crude prices continue to rise, Iranian Oil Minister Bijan Zanganeh has said, Reuters reported.
“There will be no decision on this in OPEC’s next meeting … if oil prices continue to increase, there will be no need to extend the deal,” Zanganeh stated.
The price of Brent Crude has risen since April 17 from just under $72 a barrel to almost $74.5 a barrel on April 26.
Energy Minister for the United Arab Emirates Suhail Al-Mazrouei said earlier in April the most of the countries involved in the OPEC, non-OPEC agreement supported a long-term alliance, Reuters reported.
OPEC and several non-OPEC oil producers agreed to a supply cut in January 2017 in an attempt to increase prices.
“I think the idea itself is liked by, if not all, the majority of the countries,” Al-Mazrouei said, “The ultimate target is to have this group working together for way longer than those two years than we’ve been working together.”
“The objective is to have this group of responsible producers communicating, looking at the market together,” he added, affirming the aim of the alliance is to build on the progress made since the inception of the deal through sharing information and building trust.
“I think the level of trust has increased significantly among us. We call each other, the ministers, and the technical people and commercial people in those countries, they are in direct communication.”
Saudi Crown Prince Mohammed bin Salman announced on March 26 that Riyadh and Moscow were in talks regarding the extension of the agreement.
“We are working to shift from a year-to-year agreement to a 10-to-20-year agreement,” Salman told Reuters in an interview in New York. “We have agreement on the big picture, but not yet on the detail,” he added.
Saudi Arabia spearheaded OPEC’s coalition with Russia and other non-OPEC countries to help reduce oversupply when oil prices collapsed to below $30 a barrel in 2016 compared to above $100 a barrel in 2014.