Russia says looking at joint oil organisation with OPEC

Russian energy minister Alexander Novak said on Tuesday a joint organisation for cooperation between OPEC and non-OPEC countries may be set up once the current deal on oil output curbs expires at the end of this year.

Saudi Crown Prince Mohammed bin Salman told Reuters last month that Saudi Arabia and Russia are working on a historic long-term pact, possibly 10 to 20 years long, that could extend controls over world crude supplies by major exporters.

Novak said on Tuesday he and his Saudi counterpart, Khalid al-Falih, discussed long-term cooperation and that the current “mechanism of interaction” had proved to be effective.

Read: OPEC seeks “very long-term” cooperation with other oil exporters

“We are now thinking about a format for cooperation which could be for the longer-term, which would include the possibility of market monitoring, information exchange and if needed the implementation of some joint actions,” Novak told reporters.

Under an agreement by members of the Organization of the Petroleum Exporting Countries led by Saudi Arabia, and non-OPEC producers, Moscow pledged to cut output by 300,000 barrels per day (bpd) from a figure of 11.247 million bpd based on its output in October 2016.

“Oil production restriction is not a panacea, this is a necessary measure,” Novak said on Tuesday, adding that broader cooperation with OPEC is warranted.

He also said that Russia joining OPEC is not on the agenda for discussions.

Relations between Russia and Saudi Arabia have warmed in recent months, in part due to the successful implementation of the global oil pact. Last year, Saudi King Salman visited Moscow.

A high-ranking delegation from Saudi Arabia is expected to attend the Russian economic forum in St. Petersburg in May, where Russian President Vladimir Putin will be present, according to the event’s organisers.

Novak said there were no concrete plans on long-term cooperation yet, while new proposals for cooperation will be discussed during an OPEC ministerial committee tasked with monitoring the output cut deal in the Saudi city of Jeddah later in April.

Novak is part of a delegation of Russian officials led by Putin that arrived in Turkey on Tuesday for talks.