OPEC, Russia and allies were set on Saturday to extend record oil production cuts through July after crude prices doubled in the past two months on the back of their efforts to withdraw almost 10 percent of global supplies from the market.
According to a draft declaration seen by Reuters as a video conference opened, the group known as OPEC+ was set to demand that countries such as Nigeria and Iraq which exceeded quotas in May and June compensate with extra cuts in July to September.
OPEC+ had initially agreed in April that it would cut supply by 9.7 million barrels per day (bpd) during May-June to prop up prices that collapsed due to the coronavirus crisis. Those cuts were due to taper to 7.7 million bpd from July to December.
Two OPEC sources said the group had already agreed to a one-month extension to cuts that have been made by its members.
Ahead of the talks, OPEC sources said Riyadh had been considering an extension to August or even December.
Saudi Arabia, OPEC’s de facto leader, and Russia have to perform a balancing act of pushing up oil prices to meet their budget needs while not driving them much above $50 a barrel to avoid encouraging a resurgence of rival US shale production.