Putin Says International Deal On Oil Output Cap Is Close

Saudi Arabia and Russian Federation have not said the output freeze would be void if Iran refuses to join in, leaving room for a potential compromise.

The market, under sustained pressure from abundant supplies, gained a lift in the latter half of February when Opec kingpin Saudi Arabia and non-Opec member Russian Federation agreed to freeze output to January levels, if other major producers followed suit.

Russian President Vladimir Putin will meet the heads of top Russian oil companies on Tuesday to discuss the impact of low oil prices on revenues, Vedomosti business daily reported Sunday, citing an anonymous source.

“As (energy) minister (Alexander Novak) has reported, you all agree with this proposal”, Putin said.

“It’s about us not ramping up oil production this year”, he said.

In opening remarks to what was the first official meeting with oil firms since the Doha agreement, Putin said: “our task is to maintain Russian oil sector’s stability, ensure is development, implementation of long-term projects”.

The deal would cap Russian production at the level of January 2016, Putin said.

Russian Energy Minister Aleksandr Novak was quoted as saying that the deal mentioned by Putin was agreed to by 15 nations accounting for 73 percent of global production.

Non-OPEC Oman and some OPEC sources have floated the idea of exempting Iran from any output freeze, an approach taken toward Iraq in the past when it was subject to worldwide sanctions.

Russia’s economy is in recession and the state’s finances have been hammered by the recent plunge in the price of oil.

And by the June OPEC meeting it will still be too early to say how fast Iranian output is rising.