Tensions are growing between Russia and Saudi Arabia. Riyadh believes that Moscow has not fully fulfilled its promise to cut oil production and thus jeopardizes the kingdom's efforts to raise energy prices. In this regard, Saudi officials appealed to their Russian counterparts to adhere to the agreements.
Source. The Wall Street Journal writes about this.
According to the sources, the disagreements between the world's two largest oil producers are very noticeable on the eve of the OPEC+ ministerial meeting. The cartel members are to meet on June 4 in Vienna to discuss the production plan for the second half of the year.
In early April, Saudi Arabia, which is the de facto leader of OPEC, and other oil producers suddenly announced a voluntary reduction in production by 1.65 million barrels per day. Brent prices responded by rising. This decision was preceded by a sharp decline in oil prices in late March amid turmoil in the global banking sector.
However, recent data show that Russia continues to pump large volumes of oil into the market, oil industry officials and traders told the WSJ. This helped it increase its profits, but worsened the oversupply situation. As a result, oil prices have fallen by almost 10% since April, the newspaper writes. On Friday, a barrel of Brent cost $76.95.
It is not yet clear how Russia's actions will affect its energy alliance with Saudi Arabia and what the kingdom will do. According to the WSJ, the current disagreement between Riyadh and Moscow is nothing new for OPEC+.
The fact that Russia has not fully reduced its oil production to the declared 500,000 bpd was stated by the International Energy Agency in its April report. According to its estimates, exports of oil and oil products were higher than in any of the full months since the start of the invasion of Ukraine, reaching 8.3 million bpd.
Background. Read more about this in Mind's article "Highlights of the week: we've got a deal – the US default will probably be avoided, Russia vs China, OPEC+ will be hot".