Russia and Saudi Arabia have to cut oil production by at least 1 million barrels per day under the current market conditions. This was stated by the Iranian representative in the Organization of Petroleum Exporting Countries (OPEC) Hossein Kazempour Ardebili.
“The minimum that they have to cut is 1 million barrels per day”, said Hossein Kazempour Ardebili. According to him, Saudi Arabia and Russia will be forced to cut yields because of the drop in oil prices of about 15 USD per barrel, which is linked to the earlier decision of both countries to increase yields.
Hossein Kazempour Ardebili stressed that the fall in oil prices will affect OPEC members, which have failed to increase supplies to same pace as Saudi Arabia and Russia.
The new US sanctions against Iran, covering oil exports, as well as over 700 banks, companies and individuals, came into force on November 5th. The US authorities have temporarily excluded China, India, Japan, South Korea, Italy, Greece, Taiwan and Turkey from the sanctions. According to various estimates, Iranian oil exports have already decreased by 1 million barrels per day. Its maximum level was reached in April this year – 2.8 million barrels per day.
However, Russia and Saudi Arabia have already begun bilateral consultations on a possible return to a reduction in oil production in 2019. The issue could be discussed at the meeting of the OPEC+ Monitoring Committee in Abu Dhabi, which will take place on November 11. Prior to the start of the negotiations, the two countries maximized the yield for five months.
The crude oil prices went up on Wednesday following an information that Russia and Saudi Arabia are negotiating a possible contraction in 2019.