Saudi Arabia’s energy minister Khalid al Falih warned that weakening compliance with the Opec and non-Opec output cuts was hurting oil markets on Monday, urging producers to tackle “head on” any slippage in their 1.8m-barrels-a-day supply deal.
Arriving in St Petersburg for a monitoring committee meeting with Russia, the largest actor in the deal that is not a member of the cartel, Mr Falih said that the participants must stand ready to take additional measures if necessary.
The meeting on Wednesday is not expected to lead to immediate action in the form of deeper cuts but the group of oil producers is facing growing pressure as crude prices continue to languish below $50 a barrel.
Russia’s energy minister Alexander Novak told the Financial Times this weekend that Libya and Nigeria – two Opec members that were exempt from the cuts due to supply disruptions, but whose output has recovered markedly this year – must be capped once their production stabilises. His comments were seen pressuring Saudi Arabia, Opec’s largest producer, to do more.
Mr Falih said that rising demand growth was making oil markets look “healthier” and would offset a recovery in the US shale industry in 2018, but cautioned rising exports were becoming a concern for oil markets.