Vladimir Putin wants oil output cut to continue

Moscow: Russian President Vladimir Putin on Wednesday said a deal between Opec and rival oil producers to reduce production could be extended to the end of 2018, a longer timeframe than others have suggested, in a bid to curb a supply glut.

The pact between the Organisation of the petroleum exporting countries, Russia and other producers on cutting output by about 1.8 million barrels per day (bpd) is now due to expire in March.

“Everyone is interested in a stable market. What we did with Opec, I believe, is beneficial for all the global economy,” Mr Putin told an energy forum in Moscow attended by several OPEC oil ministers.

“When we decide on whether to extend or not, we will decide on the timeframe. But on the whole, if speaking about a possible extension, this should be at least until the end of 2018.”

The Russian President’s comments raise the prospect of a longer extension than others have mentioned. Saudi energy minister Khalid al-Falih and other Opec ministers have suggested prolonging the deal by months but not until the end of 2018.

The participants are showing more confidence that the supply cuts, which began in January, are starting to erode a glut. With help also from rising demand, oil last week reached almost $60 a barrel, its highest in more than two years.

Mr Putin said he expected the world oil market soon to be balanced. Oil, which began to slide from more than $100 in mid-2014 due to excess supply, was trading just below $56 on Wednesday.

Opec ministers attending the Moscow event said they were considering extending the deal or making a deeper cut. The accord has already been extended once at Opec’s last meeting in May, but producers have so far balked at a larger cut.

“It depends on a collective decision and consensus within Opec, but I think there is no objection against this proposal,” Iranian oil minister Bijan Zanganeh told Reuters when asked whether there were talks on deepening or extending the cut.