Oil Industry Bosses Will Discuss OPEC Policy

Key oil ministers and company executives will gather in Russia later this week for the St. Petersburg International Economic Forum, amid expectations that the business meeting will prepare the ground for talks about the OPEC-Russia production cut deal and sanctions on Russia.

Attendees will include Saudi Arabia’s Energy Minister Khalid al-Falih, OPEC Secretary-General Mohammad Barkindo and UAE’s Energy Minister and current OPEC President Suhail al-Mazrouei, Platts reported.

They are expected to discuss the current oil market conditions and the recent rise in oil prices.

The St. Petersburg forum comes just a month before the OPEC summit in Vienna, Austria, on June 22, at which countries participating in the global production cut deal are expected to review the state of the oil market and possibly adopt new metrics to measure the agreement’s success.

By the current metric—the five-year average of OECD commercial stocks—the glut is gone, according to both OPEC and the International Energy Agency.

The forum also comes amid geopolitical concerns that have lately pushed oil prices to three-and-a-half year highs—Venezuela’s plunging oil production and the possible reduction of Iranian oil exports after the US withdrawal from the Iran nuclear deal.

Saudi Arabia has signaled that it was ready to coordinate global action to ease oil market anxiety.

"But the hosts of this week’s forum, Russia, may not be too keen to let oil prices run too high," Christian Boermel, senior analyst, Russia upstream at Wood Mackenzie, told Platts.

For two consecutive months, in March and April, Russia exceeded its quota under the OPEC/non-OPEC deal—a move that some analysts interpret as Russian companies getting tired of capping production, despite assurances from Moscow that it is sticking to the pact.

Among the industry executives expected to attend the Russian forum this week will be the CEOs of the biggest European firms—Total’s Patrick Pouyanne, Shell’s Ben van Beurden, and BP’s Bob Dudley. All three companies have presence and interests in Russian projects and operations.