THE Organization of Petroleum Exporting Countries (OPEC) and Russia reaffirmed yesterday that they’ll persevere with oil production cuts until the end of the year to clear a global glut and signaled their readiness to cooperate beyond that.

Russia is prepared to continue cooperating with OPEC and its de-facto leader Saudi Arabia even after the cuts expire, Energy Minister Alexander Novak said. Producers should keep limits on output through 2018 as the market may rebalance at the end of the year or in 2019, Saudi Energy Minister Khalid Al-Falih said. Neither minister said whether the cuts would continue in 2019.

“The world’s two biggest oil producing and exporting countries can continue their cooperation for the good of the crude industry, for the good of stability,” Novak said in Muscat, Oman.

The oil market still isn’t fully rebalanced, though ministers from the OPEC and allied producers agreed Sunday in Muscat that their cuts pact is working, he said.

Oil ministers from several OPEC members, including Saudi Arabia, met with their Russian and Omani counterparts to assess compliance with the cuts accord expiring at the end of the year.

Saudi Arabia and Russia are orchestrating the effort to trim production to drain stockpiles and prop up prices. While benchmark Brent crude has gained 2.6 percent this month, U.S. oil output is set for strong growth this year as prices rally, the International Energy Agency said Friday.

Soft oil demand foreseen in the first half led the ministers to consider cutting for the full year, Al-Falih said. They agreed to cooperate beyond the end of this year, without deciding on a mechanism for this cooperation, he said.

“As we approach the rebalancing by the end of 2018, we need to extend the framework but not necessarily in the production levels,” Al-Falih said. Excess oil inventories have declined by 220 million barrels from a level of 340 million barrels in early 2017, he said. “We’re uncertain that the pace of inventory drawdown will continue in coming months.”

Russia agreed to continue cooperation with OPEC, even without cutting output, if that helps to support the market, Novak said. Ministers will need to see how the market develops before deciding if there’s a need to adjust caps on production, he told reporters earlier.

While neither Novak nor Al-Falih is the final arbiter of oil policy in his respective country, their flourishing partnership has helped deliver an unprecedented period of Saudi-Russian cooperation that is re-shaping the global oil market. (SD-Agencies)