OPEC wants to formalize pact with 10-nation group led by Russia

Saudi Energy Minister Khaled al-Faleh, left, and Russian Energy Minister Alexander Novak at a meeting of OPEC and non-OPEC producers last April. AFP/Getty Images

According to the Wall Street Journal, citing OPEC (Organization of the Petroleum Exporting Countries) officials, Saudi Arabia and its Persian Gulf allies are proposing a formal partnership with a 10-nation group of oil producing countries led by Russia in an effort to try to manage the global oil market, an alliance that would radically transform the cartel.

MarketWatch says the move comes as the OPEC faces pressure from President Trump to keep oil prices low for U.S. consumers and as increased output from American shale producers reduces the influence that cartel members have over the market.

The proposal would formalize a loose union between members of the OPEC and the group led by Moscow, which includes some former Soviet republics and other countries. According to CNBC, the so-called OPEC+ coalition first reached a historic deal in 2016 to slash output in a bid to end a punishing oil price downturn.

The coalition involves two dozen producers that have increasingly worked together in recent years. They briefly lifted the caps on production last year, but agreed to fresh production cuts in December after a three-month collapse in oil prices.

OPEC Secretary General Mohammed Barking and some oil ministers have long sought to make the loose alliance permanent. However, Iran and other producers have opposed a tighter partnership, fearing it could be dominated by Saudi Arabia and Russia, according to officials in the cartel. Riyadh and Moscow are reportedly the world’s top two oil exporters. ■

Sources:

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