OPEC, Russia Hold High Level Meeting

OPEC and Russia held the ninth “high-level” meeting of the OPEC-Russia Energy Dialogue in Moscow recently, a joint release posted on OPEC’s website highlighted.

The meeting was co-chaired by Alexander Novak, Deputy Prime Minister of the Russian Federation, and Haitham Al Ghais, Secretary General of OPEC, the release pointed out, noting that the meeting “constitutes an important milestone in the energy dialogue”.

“It emphasized the strategic importance of cooperation between OPEC and the Russian Federation, including through the frameworks of the ‘Declaration of Cooperation’ and the ‘Charter of Cooperation’,” the release stated.

“Discussions revolved around developments in the global oil and energy markets and the outcome of the recent climate change negotiations at COP29 … as well as various issues related to the oil and energy industries, such as energy security, risk of underinvestment, and the importance of market stability in driving global economic growth,” it added.

The meeting also examined the short-, medium-, and long- term outlooks for energy markets, the release said. It noted that the “valuable ongoing cooperation between OPEC and the Russian Federation at the technical and research level was additionally highlighted”.

“In this context, the meeting noted the positive outcome of the Fifth Technical Meeting of the OPEC-Russia Energy Dialogue held on 15 November 2024 via videoconference,” the release added.

In the release, Novak said, “Russia will continue to be a key player in the oil market, maintaining its status as a reliable supplier”.

“The OPEC+ member countries are in constant contact, monitor the market situation and are ready to flexibly and promptly respond to any changes in market conditions,” he added.

“The current mechanism for implementing the OPEC+ agreement is the most effective tool for maximizing the efficiency of oil production and state revenues,” he continued.

The release stated that Al Ghais highlighted the important partnership between the Russian Federation and OPEC at all levels and commended the leadership role exerted by the Russian Federation in the ‘Declaration of Cooperation’ framework as a co- chair of the OPEC and non-OPEC Ministerial Meetings, and the Meetings of the Joint Ministerial Monitoring Committee.

The Secretary General also praised the OPEC-Russia Energy Dialogue as a dynamic platform that facilitates discussion, knowledge sharing, and exchange of views between the two parties, the release said.

According to the release, the next “high-level” meeting of the OPEC-Russia Energy Dialogue will take place “in the course of 2025 in Vienna, Austria”.

OPEC+ Moves

OPEC’s website describes the Declaration of Cooperation as an “unprecedented milestone in the history of the Organization of the Petroleum Exporting Countries”.

“For the first time ever, OPEC Member Countries coordinated with 11 non-OPEC oil producing countries (now 10 – Equatorial Guinea became an OPEC Member in May 2017) in a concerted effort to accelerate the stabilization of the global oil market,” the site adds.

A statement posted on OPEC’s site earlier this month revealed that Saudi Arabia, Russia, Iraq, the United Arab Emirates, Kuwait, Kazakhstan, Algeria, and Oman extended a voluntary 2.2 million barrel per day cut for one month until the end of December this year.

OPEC+ held its last meeting on June 2. A statement posted on OPEC’s website that day revealed that the next OPEC and non-OPEC Ministerial Meeting will be held on December 1.

An oil market update from Rystad Energy Global Head of Commodity Markets - Oil, Mukesh Sahdev, which was sent to Rigzone recently, said the oil market “is now bracing for OPEC+ action at the group’s December 1 meeting”. 

“Looking ahead to OPEC+’s virtual meeting on December 1, the group is expected to continue its cuts-compliance-quotas strategy to address the significant surplus on the crude supply side,” the update added.

“This surplus is driven by non-OPEC production growth and declining crude demand from refiners facing a bearish margins outlook,” it continued.

“The imbalance is even more pronounced in crude quality. OPEC+ has kept critical medium sour barrels off the market, while non-OPEC producers have added light sweet barrels (primarily from U.S. shale) and medium sweet barrels (largely from Brazil),” it went on to state.

The Rystad update stated that consensus on OPEC+ to further rollout the extension for cuts is strong.

“However, the critical question is how long and is there a potential for surprise and signals for the emergence of a new OPEC 4.0 strategy,” the update added.

Sahdev noted in the update that OPEC+ has evolved through three phases of market management and outlined that its “emerging 4.0 policy” focuses on “price stability, crude market backwardation, and the expansion of refining and petrochemical capacity both domestically and internationally”.

Rigzone has contacted OPEC for comment on Rystad’s oil market update. At the time of writing, OPEC has not yet responded to Rigzone’s request.

Production

In its latest short term energy outlook (STEO), which was released recently, the U.S. Energy Information Administration (EIA) showed that OPEC produced 32.03 million barrels per day of petroleum and other liquid fuels in the third quarter of this year.

Saudi Arabia produced 10.65 million barrels per day of that total during the period, according to the STEO. Russia’s output came in at 10.34 million barrels per day in the third quarter, the STEO highlighted.

The EIA’s latest STEO projected that OPEC’s production will average 32.10 million barrels per day in the fourth quarter, 32.09 million barrels per day overall in 2024, and 32.51 million barrels per day overall in 2025.

It forecast that Russia’s production will average 10.42 million barrels per day in the fourth quarter, 10.53 million barrels per day overall this year, and 10.57 million barrels per day overall in 2025.

The EIA’s November STEO did not provide production forecasts for Saudi Arabia’s output. The STEO highlighted that petroleum and other liquid fuels production includes crude oil, lease condensate, natural gas plant liquids, other liquids, refinery processing gain, and other unaccounted-for liquids. It also pointed out that OPEC figures comprise Algeria, Congo (Brazzaville), Equatorial Guinea, Gabon, Iran, Iraq, Kuwait, Libya, Nigeria, Saudi Arabia, United Arab Emirates, and Venezuela.

To contact the author, email andreas.exarheas@rigzone.com