OPEC, allies meet to review oil production cuts

BAKU, Mar 18 (AFP): OPEC nations and allied oil producers met in Azerbaijan on Monday to review a strategy of production cutbacks that has propped up crude prices.

The Saudi-dominated Organisation of Petroleum Exporting Countries and Russia agreed in 2016 to create a loose alliance of 24 oil-producing nations to limit production in the face of tumbling prices.

The so-called OPEC+ alliance has endured, with regular meetings and agreements to extend production limits, helping oil prices rise from around $40 per barrel in 2016 to an average of $70 per barrel last year.

The meeting in Azerbaijan's capital Baku brings together the group's monitoring committee to review the last extension, which saw OPEC+ nations agree to cut production by 1.2 million barrels per day from January to June.

Another meeting is due in Vienna next month to consider extending the accord.

Russian news agencies quoted Energy Minister Alexander Novak as saying ahead of Monday's meeting that Moscow was on track to meet its reduction target.

He suggested the next OPEC+ meeting should take place in May instead of April, saying time was needed to understand the impact of US sanctions on OPEC members Iran and Venezuela.

"It is hard today to plan your activities for months ahead, because the volatility is high because of the sanctions. We have to take these uncertainties into account in making decisions on the market," Interfax quoted Novak as saying on Sunday.

President Donald Trump pulled the United States out of a nuclear accord with Iran in May last year and reimposed sanctions on Tehran.

From April 28, US companies and citizens will be barred from dealing in Venezuelan crude, as Washington intensifies measures against President Nicolas Maduro's government.

But Trump has also urged OPEC to take steps to lower prices, saying in a tweet last month: "Oil prices getting too high. OPEC, please relax and take it easy."

A TASS report adds: The OPEC is ready to continue monitoring the situation on the oil market in the second half of 2019 as well, Minister of Energy, Industry and Mineral Resources Khalid al-Falih told a press conference on Sunday.

According to the minister, since the reserves are strengthening, particularly given that the US reserves remain at a high level, the joint efforts of OPEC+ will be continued until June.

The Russia's Energy Minister said that countries participating in the OPEC+ agreement would discuss possible further decisions for the second half of the year regarding the crude production cut deal in May-June.

OPEC participating countries may reach the 100 per cent compliance rate of the crude production cut agreement already in March 2019, Minister of Energy, Industry and Mineral Resources Khalid al-Falih said.