Saudi Arabia, Russia reach oil output deal and urge others to keep promises

Saudi Aramco's Ras Tanura port. Saudi Arabia and Russia have agreed to extend the historic production cuts deal for at least one month. (Aramco)
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Updated 04 June 2020

Saudi Arabia, Russia reach oil output deal and urge others to keep promises

  • Big two OPEC+ producers will extend production cuts but want compliance from all members

DUBAI: Saudi Arabia and Russia have reached agreement on extending their oil output cuts and are taking a firm line with other producers to keep their pledges.

Ahead of a meeting of OPEC+, the two biggest producers in the alliance are telling others they must adhere to agreed production guidelines or risk a return to the market chaos of April, when some oil prices hit all-time lows.

An official at one Opec delegation told Arab News an agreement was in place between Saudi Arabia and Russia to extend the historic 9.7 million barrel cuts deal for at least one month, with a regularly monthly review— but it was contingent on all OPEC+ countries keeping their promises on current production levels.

“There is no dispute between Saudi Arabia and Russia on this,” the official said. “They are sticking by the rules, and they want to put pressure on to make all OPEC+ members do the same.”

Most other OPEC+ countries are believed to be willing to stick by the April cuts for an extended period. Nigeria and Iraq are considering the proposals for stronger compliance.

A “virtual” OPEC+ meeting could still go ahead at short notice, or could take place on June 9 as originally scheduled. Saudi Arabia has additional bargaining leverage in the 1 milion extra barrels it cut voluntarily, which could be reinstated at the end of this month 

Crude prices, which topped $40 a barrel for Brent this week partly on hopes that the cuts would be extended, reflected the late uncertainty, and slipped back to just over $39.

Oil experts do not expect the negotiations over compliance to derail a long term OPEC+ deal. “Compliance is always an issue, but all will want to avoid any instability,” said Robin Mills, chief executive of Qamar Energy consultancy. “It’s quite an achievement to get to $40 from where they were a few weeks ago.”


Indonesia’s anti-trust watchdog levies $3 million in fines on Grab and partner

Updated 03 July 2020

Indonesia’s anti-trust watchdog levies $3 million in fines on Grab and partner

  • Grab infringed the anti-monopoly laws after evaluating the case
  • Grab is Southeast Asia’s most valuable startup with a valuation of $14 billion

JAKARTA: Indonesia’s anti-trust watchdog announced fines totaling more than $3 million for Grab and its business partner after finding it guilty of breaking anti-monopoly laws, a verdict the ride-hailing firm vowed to appeal.
The Business Competition Supervisory Commission (KPPU) said it had found Grab had discriminated against its drivers, prioritizing those provided by partner PT Teknologi Pengangkutan Indonesia (TPI) to the Softbank-backed firm.
In a statement, Dinni Melanie, the chair of the watchdog judicial panel, said it had found Grab infringed the anti-monopoly laws after evaluating the case on Thursday evening.
The agency imposed a fine of $2.1 million on Grab and a penalty of $1.03 million rupiah on TPI.
A spokesman for Grab, which is Southeast Asia’s most valuable startup with a valuation of $14 billion, said the firm would appeal the verdict.
“Grab’s view is that it has not violated any regulation, engaged in any anti-competitive business practices, or injured any third parties,” he said, characterizing the watchdog’s findings as “unsubstantiated allegations.”
Reuters could not immediately reach TPI to seek comment.