For the last three years, apart from the pompous exchange of the visits by the heads of the states, Russian-Saudi political dialogue did not produce much in terms of results. The mood regarding the future of oil prices is clearly reflected in state budget planning built on the assumption of prices floating in the range of $50-$60 per barrel (likely closer to the lower end) until 2036 in the best case scenario. 20, 2020: For more than three years starting in January 2017, the alliance known as OPEC+ cut crude oil production in an effort to prevent a glut as U.S. output surged. It also seemed to perceive Riyadh as a key player in the Middle East, obviously hoping to establish active political dialogue with it. OPEC stands for the Organization of the Petroleum Exporting Countries. The alliance pledged to cut by an additional 500,000 barrels a day at a minimum. Reference output levels are primarily from OPEC figures published Jan. 18, 2019. Under these circumstances, Moscow definitely took the Saudi factor out of the equation when making a decision on further Russian participation in OPEC-plus. At 494.4 million bbl, however, domestic inventories are about 13% above the five-year average for this time of year. Global oil supply data for January will make for frustrating reading in Saudi Arabia, with the next meeting of the OPEC+ production alliance just weeks away. kevin.dobbs@naturalgasintel.com, Still hours away from landfall, Hurricane Delta made waves in the natural gas market Thursday, cutting into liquefied natural gas (LNG) demand that’s been sorely needed to prevent storage from toppling. Indeed, for the last several years, Russia has demonstrated deep interest in developing bilateral and multilateral cooperation in the oil and gas sector with the Gulf countries. Slovakia, Hungary, Romania and Bulgaria) plus Germany, Austria, Belgium and Finland (Figure 1). Since 1965, OPEC is headquartered in Vienna, Austria. ISSN © 2158-8023 You have 3 free articles remaining. The link to reset the password will be sent to your email address. Oil As a result, out of the long list of discussed oil and gas projects between Saudi Arabia and Russia, only a few had been finalized in the form of contracts by the start of 2020. Interactive Map of OPEC Countries. EIA said its data show that total crude production decreased by 6.0 million b/d from April to May as a result of the deal, marking the largest monthly decline since 1993. OPEC conveys its condolences on the sad passing of the Emir of the State of Kuwait. The coalition frayed in March when its two largest producers, Saudi Arabia and Russia, couldn't agree on further curbs while the coronavirus outbreak destroyed demand. Such a gathering never happened. Sign up for the Week in Review newsletter. While the cuts have been in place for more than three years, changes were made in January. Note: Positive numbers over 100 indicate full conformity with pledged cuts. This structure emerged as a result of joint Russian-Saudi efforts that, in 2016, led to the Vienna Agreement between OPEC and non-OPEC countries, a deal aimed to decrease oil production in order to prevent the fall of oil prices and ensure their stability. OPEC Countries. Figures are in thousands of barrels a day.  |  Sources: OPEC secondary-source estimates of crude output for organization’s members. Sabena Siddiqui | Economy and trade | Oct 8, 2020, Al-Monitor Staff | Defense/Security cooperation | Oct 6, 2020, Al-Monitor Staff | Coronavirus | Oct 2, 2020, Al-Monitor Staff | Sanctions | Oct 1, 2020, Al-Monitor Staff | Sanctions | Sep 30, 2020. © 2020 Natural Gas Intelligence. Eia How many OPEC countries are there? Get access to 100,000+ more news articles & industry data. This came in response to the demand destruction imposed by the coronavirus pandemic and the heavy downward pressure it put on oil prices last spring. OPEC+, pronounced as ‘OPEC plus’, is considered an extension of OPEC when the organization makes production cut deals with non-OPEC countries. Opec+ refers to the alliance of crude producers, who have been undertaking corrections in supply in the oil markets since 2017. Non-OPEC adherence was 76%, estimates from preliminary International Energy Agency data on crude supply show. For weeks, there was speculation that the coalition’s ministers would hold an emergency meeting to address the coronavirus threat. 1.800.427.5747 That helped nudge the November Nymex gas futures…. Consequently, until the very last moment, the Kremlin’s withdrawal from the deal seemed to be hardly possible, although Russian Energy Minister Alexander Novak periodically told the international community that his country did not plan to stay the part of this structure forever. OPEC plus countries include Azerbaijan, Bahrain, Brunei, Kazakhstan, Malaysia, Mexico, Oman, Russia, South Sudan and Sudan. Chinese demand for oil products is likely to plunge by more than 35% year-on-year in the first quarter, Morgan Stanley said in a recent report, citing data from researchers at China oil giant CNPC. The US and EU sanctions imposed on Russia have also worried Saudi Aramco. In addition, Russia, one of the two powerhouses behind the pact, has increasingly seemed to distance itself from the group—if compliance is anything to judge by. Once again, though, Saudi Arabia did the heaviest lifting by far, while some key allies like Russia and Iraq struggled to comply in full. The world’s biggest crude exporter hinted in December, when the coalition revised the terms of its pact, that other nations should do more to limit a glut. Negative numbers show production actually increased relative to the baseline. Believing that transparent markets empower businesses, economies, and communities, Natural Gas Intelligence (NGI) provides natural gas price transparency and key news, insights and data for the North American energy markets. Russia has finally accepted that the era of high oil prices is gone and that nothing can make it return. The confidence of external observers that Russia would remain a loyal member of OPEC-plus was supported by the belief that Moscow’s withdrawal from the deal would inevitably backfire when it comes to Russian relations with another founding member of this structure, Saudi Arabia. At the time of the agreement, OPEC-plus called for a cut to oil output by an initial 9.7 b/d in May that gradually tapers through April 2022, when the deal culminates. EIA expects inventories to continue declining in the second half of 2020 and during most of 2021, even as demand is anticipated to increase as economies around the globe adapt to the pandemic, resulting in a relatively balanced market by the end of next year. In 2014, the US was leading globally in oil production, though it is not an OPEC member. Russia immediately used this opportunity to position itself as a more reliable supplier to India in order to increase its share of the country’s market. Now there’s a third threat: the coronavirus outbreak, which has killed thousands in China while bringing the country to a halt. However, supply also was heavily curtailed ahead of the storm, and long-range weather models trended colder. All rights reserved. Sources: Bloomberg, IEA estimates of total oil supply for non-OPEC nations; OPEC secondary-source estimates on crude output. Countries that belong to OPEC include Iran, Iraq, Kuwait, Saudi Arabia, and Venezuela (the five founders), plus the United Arab Emirates, Libya, Algeria, Nigeria, and five other countries. Sign in to get the best natural gas news and data. In September 2016, the organization faced the prospect of lower oil prices without a production cut. For instance, in 2019, although it initially demonstrated interest in buying a share in Russia’s Arctic LNG 2 project, Saudi Arabia decided to invest in the US liquefied natural gas industry instead, pointing out to Novatek that there were much more profitable and less risky US projects that also provide access to a more advanced technological base than exists in Russia. Though it expects a gradual and choppy price recovery over the remainder of this year and into 2021 — given the uncertainties of the pandemic — Moody’s expects lower oil supply to continue underpinning oil, with near-term prices forecast to average $40-45, before slowly reaching $45-65. This structure emerged as a result of joint Russian-Saudi efforts that, in 2016, led to the Vienna Agreement between OPEC and non-OPEC countries, a deal aimed to decrease oil production in order to prevent the fall of oil prices and ensure their stability. Al-Monitor - Intelligence on the trends shaping the Middle East. Its plans imply the development of new oil production projects, which is hardly possible under OPEC-plus production limitations. Plus get access to seven years of our archives. A watershed agreement in April to slash oil production by the Organization of the Petroleum Exporting Countries and its allies, aka OPEC-plus, has begun to achieve its intended effect of rebalancing an oversupplied global crude market, the U.S. Energy Information Administration (EIA) said Wednesday. His Excellency Mohammad Sanusi Barkindo, Secretary General, and the staff at the OPEC Secretariat on learning of the passing of His Highness Sheikh Sabah Al-Ahmad Al-Jaber Al-Sabah, the Emir of the State of Kuwait, offer their sincerest and heartfelt condolences to his family, the State of Kuwait and its people. How many OPEC countries are there? Yet the depth of this interest and its impact on Russia’s decision-making toward the oil market was obviously overestimated. For OPEC supply, Bloomberg uses secondary source data published in the organization’s latest Monthly Oil Market Report. The idea behind the production cuts was to shore up prices falling the dramatic fall in oil demand caused by the new coronavirus, COVID-19. Russia is nearing a psychological threshold in 2021-22 when its oil output is expected to start its fall from 11.4 million barrels per day to 6.3 million barrels per day in 2036. You’re now subscribed to Al-Monitor. acronym which stands for Organization of the Petroleum Exporting Countries Note: OPEC output includes all members; Brent price as of, Sources: Bloomberg, ICE Futures Europe, U.S. Energy Information Administration. In an earlier report, EIA estimated that global petroleum demand fell from 100.7 million b/d in the first half of 2019 to 90.0 million b/d in the first half of 2020. These companies increased both short-term and long-term borrowing in the second quarter, boosting debt by $72 billion during the quarter. But the Russian leadership did not believe that such a cut in production could actually help the market given the drop in demand and the expected growth in oil production by non-OPEC-plus countries of 2 million barrels per day in 2020. Half of the 10 OPEC countries now participating in supply cuts conformed last month, for a rate of 138%, according to Bloomberg calculations from the group’s secondary source data. In the green colored countries the aim was to develop follow‐up projects. Moody’s Investors Service said this week that improving fundamentals bolstered the summer rebound in oil prices from April, when Brent crude slipped below $20/bbl and West Texas Intermediate (WTI) plunged into negative territory.