Saudi Energy Minister Khalid al-Falih says the agreement between Russian Federation and Saudi Arabia at the G20 to extend the OPEC+ oil cut pact from July will reduce global inventories and balance oil markets.
"Therefore, it is most likely more expedient to extend the deal for nine months", Russian Energy Minister Alexander Novak told reporters in Osaka.
Asked about a deeper cut, he said: "I don't think the market needs that".
Iraqi Oil Minister Thamer Ghadhban attends a news conference after the OPEC 14th Meeting of the Joint Ministerial Monitoring Committee in Jeddah, Saudi Arabia, May 19, 2019. Only a few days later, with clear instructions from their leaders, respective oil ministers met and agreed the details of production cuts. "OPEC's biggest players, Saudi Arabia, Kuwait, Iraq and the United Arab Emirates, have already agreed to extend the deal". What's more, Saudi Arabia unilaterally lowered production below its official OPEC+ target, pumping 9.7 million barrels a day in May, compared with a ceiling of 10.3 million.
While the strategy has succeeded in raising prices, the Organization of Petroleum Exporting Countries' share of the global oil market has fallen to the lowest since 1991. But prices could stall as a slowing global economy squeezes demand and US oil floods the market, a Reuters poll of analysts found. But Iranian oil minister Bijan Zanganeh warned the unilateral way that decision was reached is "threatening the existence of OPEC". The soaring production levels of shale oil in the United States and the weak outlook with regards to the entire industry as a whole, has forced the OPEC to continue with the output cut into 2020.
The OPEC+ deal has a mixed track record of supporting oil prices, in part because some members have at times over-produced.
Front-month Brent crude futures for September touched an intra-day high of $66.14 a barrel and were up 89 cents, or 1.4 per cent, at $65.63 a barrel by 1117 GMT.
"Without unity among members of OPEC, it is meaningless to plan cooperation between OPEC and non-OPEC countries", the Oil Ministry's website SHANA quoted Zanganeh as saying before leaving Tehran to attend an OPEC meeting in Vienna.
He added, "If OPEC wants to be alive, we should take decisions inside OPEC and not receive decisions from outside OPEC".
Most of the cuts came from OPEC nations, who agreed to cut 800,000 barrels per day, with the rest of the cuts coming from Russian Federation and other countries.
Meanwhile, fears are mounting over the impact a supply cut could have on the global economy, as the USA and Iran remained at loggerheads after Washington imposed sanctions on Tehran following the downing of an American drone.
The news sent NY oil prices shooting above $60 per barrel on Monday for the first time since May, with sentiment also buoyed by rising global equities after Washington and Beijing agreed to restart trade talks.