VIENNA: Saudi Energy Minister Khalid Al-Falih said on Sunday that the Organization of the Petroleum Exporting Countries (OPEC) and its allies led by Russia would most likely extend their oil output-cutting deal by nine months and that no deeper reductions were needed.
“I think most likely a nine-month extension,” Falih told reporters when asked about Saudi preferences.
Asked about a deeper cut, he said: “I don’t think the market needs that.”
“Demand is softening a little bit but I think it’s still healthy,” he said, adding that he expected the market to balance in the next six to nine months.
Russia has agreed with Saudi Arabia to extend the deal with OPEC, Russian President Vladimir Putin said earlier, as oil prices come under renewed pressure from rising US supplies and a slowing global economy.
Demand is softening a little bit but I think it’s still healthy.
Khalid Al-Falih, Saudi energy minister
Oil ministers from OPEC meet on Monday in Vienna, followed by talks with non-OPEC oil producers on Tuesday.
The US, the world’s largest oil producer ahead of Russia and Saudi Arabia, is not participating in the pact.
The UAE energy minister said on Sunday he hoped for a productive outcome from the Vienna meetings, according to his official Twitter account.
“Confident the alliance will reach a decision that will restore oil market balance,” Suhail bin Mohammed Al-Mazroui tweeted.
A nine-month extension would mean the deal runs out in March 2020.
Russia’s consent means the so-called OPEC+ group may have a smooth meeting if OPEC’s third-largest producer Iran also endorses the arrangement.
New US sanctions on Iran have reduced its exports to a trickle as Washington seeks to change what it calls a “corrupt” regime in Tehran.