Saudis, Russia negotiating potential deal for gradual oil-output increase

Saudi Arabia and Russia are negotiating the details of an oil supply hike which would add around 2m barrels a day to the cartel’s output from August to December, said delegates who spoke to Bloomberg on Thursday.

The implementation of the deal will be conditioned by the state of the relationship between Iran and the US. Both countries are attempting a return to the 2015 nuclear deal which would see US sanctions on Iranian oil exports scrapped.

At the same time ministers from the Organization of Petroleum Exporting Countries adjourned their first round of online talks on Thursday.

They were scheduled to hold two more video conferences with their non-OPEC allies later in the same day.

Oil prices rose, jumping above $75 a barrel in New York for the first time since 2018, as the outlines of the deal suggested OPEC+ was sticking to its policy of keeping the market tight.

OPEC+ was already in the process of reviving crude supplies halted last year in the initial stages of the pandemic. The coalition decided to add about 2m barrels a day to the market from May to July.

According to Bloomberg, there were several factors that could undo the rally including the risk of a supply influx if the US reached an agreement with Iran.

Possible lockdowns if Covid-19 cases rose were also a risk that could threaten the demand recovery.