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Russia says it might not stay committed to the OPEC oil deal until the end

Russia says it might not stay committed to the OPEC oil deal until the end
  • OPEC, Russia and several other allied producers have spearheaded an ongoing effort to try to clear a global supply overhang and prop up prices.

  • The agreement, which came into effect in January 2017, has already been extended through until the end of this year.

Russia may not support the ongoing oil supply-cutting deal led by OPEC until the end of the year, Russian Energy Minister Alexander Novak told CNBC Friday.

OPEC, Russia and several other allied producers have spearheaded an ongoing effort to try to clear a global supply overhang and prop up prices. The agreement, which came into effect in January 2017, has already been extended through until the end of this year.

However, Russia might jump off before the expected end-date.

"I cannot at the moment give you a precise answer because we do not have the full idea how the market is going to perform in the forthcoming months. We need to carry on monitoring the situation," Novak told CNBC's Steve Sedgwick in Jeddah.

"I cannot tell unequivocally: yes or no, this would be too blunt," he said. "We keep our options open in order to be able to take a more balanced decision based on more accurate data over a longer-term period."

'Patient has not yet fully recovered'

The agreement was initially brought forward to boost oil prices after years of stalled levels. Oil producing countries are set to meet in June to review the deal.

Novak acknowledged that their agreement has worked, but there's still more to be done.

"Undoubtedly, the situation is much better than it was three months, half a year or a year ago, but the patient has not yet fully recovered," he said.

"To continue with the metaphor: we have brought the temperature down but we have not seen a full recovery yet," Novak added.

The Russian minister explained that what will determine the future of the deal is the situation in the market.

"I would like to emphasize once again that we need to proceed according to the market situation and we need to be confident that we have achieved a stable state of affairs," he added.

Earlier on Friday, the Saudi Arabian Energy Minister, Khalid al-Falih, told CNBC that it's not mission accomplished yet for the oil producers.

"We have to be patient. We shouldn't jump the gun, we shouldn't be complacent and listen to some of the noise such as 'mission accomplished.' I think we still have work ahead of us," he said.

The next key date is June, when ministers reconvene to asses the path forward for the oil deal.

-- CNBC's Sam Meredith contributed to this report.



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