Putin says oil pact with OPEC may be extended to end-2018

MOSCOWPresident Vladimir Putin (picture) said Russia may agree to extend a deal with OPEC to curb oil supplies beyond March to the end of 2018, though he’ll wait to make a decision until nearer the end of the existing pact.

“Based on the realities in March 2018, we will make our decision, but I do not rule out that we may extend” the agreement, Putin said at the Russian Energy Week conference in Moscow yesterday. “If we speak about a possible extension, then of course, it should be at least until the end of 2018.”

Russia, which relies on energy for more than a third of its budget revenue, reached a historic accord last year with the OPEC to cut production, hoping to eliminate a global oversupply. While the nation’s economic growth accelerated to the fastest pace in almost five years in the second quarter amid recovery in crude prices, the supply glut has taken longer than expected to clear. The producers may need to agree a second extension to their deal, potentially continuing the curbs into late 2018.

Russian Energy Minister Alexander Novak has signalled willingness to prolong the cuts if needed, while also making clear the Kremlin’s commitment wasn’t open-ended. The nation has benefitted from the pact with OPEC, Finance Minister Anton Siluanov said in an interview in September.

Russia’s budget revenue from oil and gas taxes, which earlier this year recovered to 2015 levels, fell again by July on crude-price fluctuations and a stronger ruble. — Bloomberg