2018.05.2720:27:00UTC+00Russia’s Energy Minister Says Oil Production Could Revert to October 2016 Level

Russia's energy minister, Alexander Novak, said that a return to the oil production levels that were observed in October 2016, the baseline for the present agreement to reduce production, is one of the options for lifting curbs.

According to sources, this week, Saudi Arabia and Russia were discussing lifting OPEC and non-OPEC oil output to ease 17 months of strict supply curbs amid worries that a price rally has overextended its course.

Novak told the media that they have extended the deal until the end of 2018 and that they talked about the mentioned scenario. But he added that a decision will be made in June, referring to the meetings of OPEC and non-OPEC nations in Vienna on June 22-23.

The present deal came into effect on January 1, 2017, and envisioned global oil producers lowering their amalgamated output by 1.8 million bpd to drain the bloated inventories and to boost oil prices.

Russia's oil production hit a 30-year peak of 11.247 million bpd in October and it vowed to reduce it by 300, 000 bpd to 10.947 million.

In March and April of this year, Russia failed to attain full compliance of the deal, producing at a rate of 10.97 million bpd, a 11-month peak.

Oil prices have rallied to $80 per barrel, levels not observed since late 2014. Russian President Vladimir Putin said on Thursday that the price of $60 is appropriate for Russia.

Novak was also quoted stating on Saturday that he expected Iran to lower its production by no more than 10 percent as a result of the move by the U.S. to abandon a nuclear deal and reinstate sanctions against Tehran.