It is highly unlikely that OPEC and other oil producers would set up a joint structure due to the additional red tape it would create as well as the risk of U.S. monopoly-related sanctions, Russian Energy Minister Alexander Novak said Dec. 27.
OPEC and other top oil producers led by Russia have since the end of 2016 made an unprecedented joint effort to curb output and support prices.
OPEC and Russia jointly produce more than 40% of the world's oil.
RELATED: Analysts: OPEC Decision Good For Global Market, US Shale Producers
Russia's energy ministry had said that Moscow and OPEC lynchpin Saudi Arabia had reached a general agreement that the OPEC+ format should be "institutionalized" and extended until 2019 and beyond to monitor the market and take joint action if needed.
However, Novak said such an idea has been ditched.
"There is a consensus that there will be no such organization. That's because it requires additional bureaucratic brouhaha in relation to financing, cartel, with the U.S. side," Novak told a briefing to reporters.
"I think, non-OPEC [countries] will not agree as they don't want to be hit by sanctions," he continued.
Proposed U.S. legislation known as "NOPEC" could open OPEC up to anti-trust lawsuits but has long laid dormant, with previous U.S. presidents signaling that they would veto any move to make it law.
However, U.S. President Donald Trump has been a vocal critic of OPEC, blaming it for high oil prices and urging it to increase output.
"This won't be an organization, this is some mechanism of cooperation: to convene, to discuss, adopt some memorandums, joint resolutions," Novak said about future cooperation with OPEC.
Recommended Reading
Six New Dean Wildcats Come With 95% Oil in Northern Midland Basin
2025-02-21 - SM Energy reported geologic variability in deposition in the new play in southern Dawson County, Texas, but “it's really competitive.”
Matador Touts Cotton Valley ‘Gas Bank’ Reserves as Prices Increase
2025-02-21 - Matador Resources focuses most of its efforts on the Permian’s Delaware Basin today. But the company still has vast untapped natural gas resources in Louisiana’s prolific Cotton Valley play, where it could look to drill as commodity prices increase.
SM’s First 18 Uinta Wells Outproducing Industry-Wide Midland, South Texas Results
2025-02-20 - Shallow tests came on with 685 boe/d, 95% oil, while deeper new wells averaged 1,366 boe/d, 92% oil, from two-mile laterals, SM Energy reported.
Occidental to Up Drilling in Permian Secondary Benches in ‘25
2025-02-20 - Occidental Petroleum is exploring upside in the Permian’s secondary benches, including deeper Delaware Wolfcamp zones and the Barnett Shale in the Midland Basin.