Saudi Arabia seeks to persuade Russia to join oil cuts
VIENNA - Saudi Arabia is seeking to persuade Russia on Wednesday to cut oil production substantially with OPEC next year in an attempt to arrest a decline in the price of crude and prevent another global glut.
Russian Energy Minister Alexander Novak was due later in the day to meet his Saudi counterpart Khalid al-Falih, whose country leads the Organization of the Petroleum Exporting Countries.
OPEC holds policy talks on Thursday in Vienna, followed by a gathering with allies including Russia on Friday.
Saudi Arabia has indicated it wants OPEC and its allies to cut output by at least 1.3 million barrels per day, or 1.3 percent of global production.
Riyadh wants Moscow to contribute at least 250,000-300,000 bpd to the cut but Russia insists the amount should be only half of that, OPEC and non-OPEC sources said.
"It is not easy but we will always work together with our colleagues," United Arab Emirates Energy Minister Suhail bin Mohammed al-Mazroui told reporters when asked about Russia's position.
A source close to the Russian Energy Ministry said: "No one is eager to cut unless there is an emergency. It is the United States where we are seeing the bulk of the increase in oil output. OPEC and Russia will be very careful about voluntary 'blood letting'."
Russia, Saudi Arabia and the United States have been vying for the position of top crude producer in recent years. The United States is not part of any output-limiting initiative due to its strict anti-trust legislation and fragmented oil industry.
Crude prices have sunk since October due to global economic weakness and fears of a glut due largely to rising US production.
US President Donald Trump on Wednesday urged OPEC members not to slash production at their upcoming meeting, saying global oil prices should remain low.
"Hopefully OPEC will be keeping oil flows as is, not restricted. The World does not want to see, or need, higher oil prices!" Trump said on Twitter.
If the 20 or so OPEC members and other nations at the Vienna talks -- which account for more than half of the world's oil -- continue to pump at current record levels, they risk seeing prices continue to tumble.
Prices have already plunged more than 30 percent over the past two months and a barrel of Brent crude, the European benchmark, currently stands at around $60.
But if oil producers close the taps, they risk choking off the global economy, which needs affordable oil to keep running.
Trump has repeatedly accused the oil cartel of keeping prices artificially high.
That has put OPEC kingpin Saudi Arabia in a delicate position -- Riyadh is keen not to incur Trump's wrath as relations between the two countries become increasingly complicated in the wake of the murder of opposition journalist Jamal Khashoggi.