Russia intends to increase its crude production for an additional 300,000 barrels a day by the beginning of next year unless they hit Saudi Arabia to limit production, the two people who knew about the plan told the Financial Times.
Moscow has plummeted since June and returned to drilling new fields, boosting production up to post-Soviet alliances of 11.5 million b / d as part of the Riyad agreement to deliver oil markets well, as US sanctions crimp Iran's oil exports.
But the growth rate of production from Russia, whose output jumped nearly 450,000 b / d since May, with Saudi Arabia's record-breaking production and increased production in the US, threatened to overcome the oil market, and prices have fallen by 17 percent in the last months days at $ 71 a barrel.
The American decision to issue more deviation from Iranian than expected when it re-agreed the sanctions this week added to the oil market's intention that stockpiles could be far greater than expected just a month ago when it was raw at four-year highs for $ 86 a barrel .
Riyadh said he pushes Moscow to think about slowing down production in the new year to help boost the price and maintain the market balancing, as the poor slide could accelerate.
But Russia is said to be hesitant at this stage to agree to a reduction. Its oil companies want to bring new production that has been occupied by the Moscow Riyadh in the past two years, which saw them cut production from the beginning of 2017 to this summer.
"[Russia] it can still add between 200,000 and 300,000 b / d in a short period of time – within a few months, "one of the people said, adding that it depended on future decisions with his allies in Opole.
People familiar with Saudi Arabia think it would be stupid to cut off the cuts at this stage if the market faced significant over-supply in 2019 but would not allow shortages.
Both countries' foreign ministers, Khalid al-Falih and Alexander Novak, should meet this weekend in Abu Dhabi as members of the expanded "Opec +" meet to discuss the development of the market, ahead of the formal ministerial meeting of Opeca in Vienna next month,
Mr. Novak is expected to hold talks with Russian oil companies to discuss this issue on Thursday, and a person familiar with the situation told FT.
Any decision to reduce oil supplies could be a political burden for Saudi Arabia. Her move to boost production this summer was fueled by calls from the United States, its Western Alliance chief, to help maintain price.
While American US elections are not on their way, removing the threat of higher oil prices as a direct political issue for US President Donald Trump, Washington is still unbelievable to look kindly at any Saudi Arabian move to raise prices. Relations between the two countries were also strained for the murder of US journalist Jamal Khashoggi.
Helima Croft at RBC Capital Markets said the kingdom could be "sorry or another guessing about the decision to overspend production before the sanctions came into force."
Gary Ross of the Black Gold Fund said Saudi Arabia focused on laser levels at global inventory levels that have increased in the past few weeks and would not "let this be avoided."
"The United States jumped a bit with the exception of Iran and Saudi Arabia now needs to adjust again," he said, adding that he believed 1 mb / d cut could be needed to balance the market when the Opec + group met in December .
That figure was also voiced by Iranian Governor Opeca Hossein Kazempour Ardebili, who opposed Saudi Arabia and Russia, primarily to raise production, accusing them of having made an American bid and trying to steal Iranian buyers.
"There is an increasing sense amongst all the producers that the two have reacted excessively to the market situation that Americans have vetoed with rhetoric and that without the powers of Opeca they exceeded their limits," Kazempour said.