OPEC Secretary-General Mohammad Barkindo told CNBC on Tuesday he has President Vladimir Putin’s word that Russia will not flood the oil markets. This raises hope that the recent spike in oil price would be sustained with anticipated increase later this year.
Barkindo told CNBC: “I have had and received assurances both from (Energy Minister) Alexander Novak and President Putin that they would remain committed to the OPEC/non-OPEC collaboration under the declaration of cooperation.”
Barkindo also said recent falls in the oil and stock markets were “just a blip”. “So the fundamentals are so strong we do not expect any hiccup along the way similar to what we had or we saw last year.”
He said he was not concerned by rising competition among OPEC, Russia and the United States in the Chinese market: “The growing concern now in the industry is whether we have enough capacity and whether we are ready and willing to continue to provide, to supply this market with this growing demand.”
Earlier, Gazprom Neft—the Russian oil company that has publicly expressed frustration with the OPEC-Russian deal to curtail oil supply— said it does not rule out that the joint cooperation pact could last until the first half of 2019.
Gazprom Neft is basing its planning on that assumption, Sergey Vakulenko, head of strategic planning at the oil producing arm of Russia’s gas giant Gazprom, told Reuters on Thursday.
Before the extension of the production cut pact in November last year, Gazprom Neft had been hinting that it was not happy with the deal as it had to sacrifice production growth plans as Russia and OPEC restrict oil supply to draw down the global overhang.
In October 2017, a month before OPEC and allies decided to extend the deal to the end of 2018, Gazprom Neft’s first deputy CEO Vadim Yakovlev said in an interview with Reuters—also published on the corporate website—that the company sees the OPEC deal as short term. Gazprom Neft is holding its nose at the deal as it is forcing the firm to scale back production growth plans, Yakovlev said.
Months before that, in June 2017, Gazprom Neft CEO Alexander Dyukov had said in another interview published on Gazprom Neft’s website:
“Gazprom Neft, as you know, has, in recent years, aggressively expanded production — by seven to nine percent per year — and, of course, we had planned to continue growing at that same rapid pace. Following the OPEC agreement, instead of growing at eight to nine percent, we have increased production by just 4.5 to five percent. Which is, without a doubt, a negative factor for us.”
