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Russia’s President Vladimir Putin and his Iranian counterpart Hassan Rouhani agreed to continue coordinating steps in global hydrocarbons markets in a phone conversation late Monday ahead of Wednesday’s OPEC meeting, according to the Kremlin.
«The presidents agreed to continue coordinating steps in global hydrocarbons markets, including as part of the energy dialog between Russia and the Organization of the Petroleum Exporting Countries,» the Kremlin said in a statement.
The leaders underlined «the crucial nature of OPEC measures to limit crude production as a key factor for stabilizing the oil market,» it added. The statement came two days before 14 OPEC countries’ ministers meet in Vienna to try to clinch what would be its first coordinated crude output cut since 2008, to help accelerate the market’s rebalancing.
They are expected to be joined by non-OPEC producers such as Russia, which has repeatedly said it will join any action agreed within OPEC.
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Putin said in October Russia is ready to join a coordinated production limit, but sees output freeze rather than a cut as sufficient. Russia’s production stands at record levels of 11.2 million b/d.
STUMBLING BLOCK
While Moscow has made attempts to secure a production deal in the past, such as at the producers’ meeting in Doha in April, Tehran’s position has been a major stumbling block in reaching an agreement.
Iran did not send a representative to the April meeting, causing the talks to flop, has been among the countries asking for exemption from restrictions, and insisted on its right to regain its pre-sanctions market share of some 4 million b/d first.
Putin’s conversation with Rouhani came the day OPEC delegates held a technical meeting in Vienna, which resulted in an output proposal to the producer group’s 14 ministers for approval at Wednesday’s meeting but still left individual country quotas unsettled.
Iranian oil minister Bijan Zanganeh on Monday reiterated his stance that OPEC members that increased their production and took Iran’s market share while it was under western sanctions should bear a greater responsibility for cutting output to rebalance the market.
The deal, preliminarily agreed in Algiers in September, set a ceiling for the group of between 32.5 million and 33 million b/d, which would require a cut of between 640,000 to 1.14 million b/d from its October levels, according to OPEC’s own estimate.
Moscow is also to host last-minute talks with two OPEC members on Tuesday, when Russia’s energy minister Alexander Novak is expected to meet Algerian energy minister Noureddine Bouterfa and Venezuelan oil minister Eulogio del Pino, both of whom flew to Moscow on Monday, according to Algeria’s energy ministry.
–Nastassia Astrasheuskaya, nastia.astrasheuska@spglobal.com
–Edited by Wendy Wells, wendy.wells@spglobal.com
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