8.9 C
New York
Friday, March 24, 2023

OPEC, Russia draft cooperation charter offers no formal body: document

OPEC, Russia draft cooperation charter offers no formal body: document© Reuters. FILE PHOTO: The OPEC logo at the oil producer group’s Vienna headquarters

(Reuters) – Scared by looming U.S. anti-cartel legislation for the oil industry, the Organization for the Petroleum Exporting Countries and its allies such as Russia have decided against creating a formal body, at least on paper.

A draft of a document – setting up a new alliance and dated January 2019 – and seen by Reuters carefully avoids any mention of sensitive issues such as oil prices, market share and production cuts.

OPEC and Russia have been cutting production together to support prices since 2017, after clinching a deal in December 2016, in moves that have provoked criticism from U.S. President Donald Trump.

A committee of the U.S. Congress passed legislation, known as the No Oil Producing and Exporting Cartels Act, or NOPEC, last week.

The draft says OPEC and Russia will discuss creating “a mechanism” rather than “an organization” when they meet in April 17-18 in Vienna, calling for the creation of an “Alliance of Oil Producing Countries”.

“It looks genuine. It’s also been updated since,” an OPEC source said without giving any further details.

Russia’s energy ministry declined to comment.

The objectives of the alliance are listed as setting up “an intergovernmental platform to facilitate dialogue” and “further strengthen the collaboration in the formulation of policies aimed at promoting oil market stability”.

The objectives are due to be achieved by promoting a better understanding among its members of energy market fundamentals as well as “permanent dialogue among oil producing countries”, according to the document.

Russia is not an OPEC member and has said it does intend to join the organization on a permanent basis. OPEC and Russia jointly produce more than 40 percent of the world’s oil.

The idea of an organization of OPEC and non-OPEC countries has been mooted since joint efforts to stabilize oil prices have come to fruition.

Russian Energy Minister Alexander Novak said in December a joint OPEC and non-OPEC structure seemed unlikely due the additional red tape it would create as well as the risk of U.S. monopoly-related sanctions.

The draft document also foresees ministerial meetings twice a year and regular encounters of technical experts.

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Source: Investing.com

Related Articles

Stay Connected

- Advertisement -

Latest Articles

Popular Articles