Key OPEC+ members Saudi Arabia and Russia have urged fellow oil producer countries to stick to supply cuts agreed earlier this year, as the International Energy Agency warns of limited capacity in the market to absorb extra barrels of crude, The Financial Times reported.
On Wednesday, the IEA signalled that further waves of coronavirus will only hinder efforts to bring the oil market into balance, with the demand rebound over the summer months now slowing. Oil prices have fallen about 7 per cent since their August peak, to slightly more than $42 a barrel.
In its monthly oil market report, the Paris-based body noted “limited headroom for the market to absorb extra supply in the next few months . . . Those wishing to bring about a tighter oil market are looking at a moving target.”
In response to a collapse in demand and prices when coronavirus lockdowns took hold in early 2020, the Opec+ group, which includes Russia, agreed in April to a record 9.7m barrels a day in production cuts.
Iraq, the United Arab Emirates and Nigeria are among countries that have pumped more than their quotas in recent months and the kingdom has pushed them to compensate for these additional barrels. Oil analysts said that Russia, too, had produced higher than its allocated levels.
On Tuesday, Saudi Arabia’s Crown Prince Mohammed bin Salman held a phone call with Russian President Vladimir Putin on Tuesday, in which they addressed the aforementioned issues, Arab News reported.
During the call, they also reviewed world oil markets, and the efforts made to achieve and maintain stability, support the growth of the global economy, Saudi Press Agency reported.
They also agreed on the importance of all oil-producing countries continuing to cooperate on and abide by the OPEC+ agreement to cut oil production.