Global deal to cap oil output is close, Russia says

MOSCOW – Russia says it is close to an international deal with OPEC countries to cap oil production, and that a final decision will be made at a meeting this month.

Saudi Arabia, Russia, Venezuela and Qatar floated an output cap last month with the aim of boosting oil prices, but it was conditional on other producers joining in. Iran has so far resisted, while Russia has agreed.

Addressing top state and private sector oil executives, Russian President Vladimir Putin said Energy Minister Alexander Novak “is agreeing and practically has agreed with his partners in the global market” to cap oil output.

“It’s about us not ramping up oil production this year,” he said Tuesday in comments published on the Kremlin website.

The deal would cap Russian production at the level of January 2016, Putin said.

Novak was quoted by the Tass news agency as saying that the deal mentioned by Putin was agreed to by 15 countries which together accounted for 73 percent of global production. He did not list the countries involved. Iran has so far not agreed because it wants to increase output after years of sanctions on its oil sector.

“It’s a critical mass of those countries who could reach a deal,” he said. “Even without Iran, a deal will be effective.”

Novak struck a more conciliatory tone, saying that there could be an exemption allowing Iran to increase production from artificially low levels under sanctions. “In my view, it could be approached individually, with a separate decision,” he said.

Novak added that a meeting of OPEC and non-OPEC producers like Russia this month will produce “a final decision.”

Russia’s economy is in recession and the state’s finances have been hammered by the recent plunge in the price of oil.