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Russia: no alarm for oil, gas industry after Qatar diplomatic row – source

World News

Russia sees no cause for alarm from the energy point of view after the decision by a number of Arab nations to sever diplomatic relations with Qatar, a Russian source familiar with the situation told Reuters on Monday.

In the past, OPEC countries cooperated in spite of diplomatic rows, the source added, requesting anonymity.

Saudi Arabia, Egypt, the United Arab Emirates and Bahrain severed their ties with Qatar on Monday, accusing it of supporting terrorism, opening up the worst rift in years among some of the most powerful states in the Arab world.

The source said Russia plans to discuss the situation around Qatar during a meeting of the monitoring committee of OPEC and non-OPEC nations.

The next meeting of the monitoring committee will be held in Russia from July 22 to July 24.

Russia’s Energy Minister Alexander Novak on May 25, said: “we discussed with Barkindo [Secretary General of OPEC] the possibility of holding a meeting of the committee on July 22 to July 24. I think that we will coordinate this date with all committee members”.

He went on to say that Russia and OPEC are discussing the possibility of holding ministerial meetings on a permanent basis in the countries of the cartel and outside OPEC.

In December 2016, OPEC and non-OPEC producers reached their first deal since 2001 to curtail oil output jointly and ease a global glut after more than two years of low prices.

That time, OPEC agreed to slash the output by 1.2 million barrels per day from Jan. 1.

Non-OPEC oil producers such as Azerbaijan, Bahrain, Brunei, Equatorial Guinea, Kazakhstan, Malaysia, Mexico, Oman, Russia, Sudan, and South Sudan agreed to reduce output by 558,000 barrels per day starting from Jan. 1 for six months, extendable for another six months.

OPEC and non-OPEC countries held a meeting in Vienna May 25 and agreed to extend oil output cuts for nine months.

The producer group, together with Russia and other non-members, agreed to prolong their accord through March, but no new non-OPEC countries will be joining the pact and there was no option set out to continue curbs further into 2018.

The market was unimpressed as prices tumbled more than five per cent to under 49 dollars a barrel in New York and more than a billion barrels were traded.

Six months after forming an unprecedented coalition of 24 nations and delivering output reductions that exceeded all expectations, resurgent production from U.S. shale fields has meant oil inventories remain well above the level targeted by OPEC.

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