Some big utilities in eastern Europe are backing a proposed EU antitrust settlement with Russian state gas exporter Gazprom, increasing the chances of a deal that is opposed by countries striving to loosen the Kremlin’s grip over their energy sectors.
The provisional agreement, announced last month, would see Gazprom avoid a fine of up to 10% of its global turnover over EU charges it abused its dominant market position and overcharged clients in eight eastern European nations.
In return the Kremlin’s gas giant, which denies the charges, has offered concessions on contract terms and pricing to settle one of the EU’s largest, longest-running antitrust cases.
However, the deal is subject to feedback from EU states and market players in the region and could still be amended or even abandoned.

Many of the countries involved — once in the orbit of Moscow and reliant on Gazprom for the bulk of their gas supplies — are disappointed at the EU’s deal-making.
They believe Russia has been exploiting their dependence in a region where gas prices can make or break governments and want to see Gazprom punished, EU diplomats said.
“Russia uses the full arsenal of tools to deploy influence: military, economic, political and even cultural,” an EU diplomat said. “Is there a country that doesn’t want this case solved? Probably not…but there is a lot of anger.”
EU antitrust authorities say the case is not political and that the market response will take priority.

A settlement would smooth business ties with Russia, which supplies around a third of its gas, despite tensions over Ukraine and Syria.
The agreement has drawn a positive response from some big utilities and network operators which said it would allow them to strike better deals with Gazprom, increasing the likelihood the EU will accept the Russian company’s concessions.
Bowing to EU conditions, Gazprom’s offer would see it do away with contract terms that bar clients from exporting its gas to other countries and tie deals to investments in pipelines.
The company would also link its prices to benchmarks such as European gas market hub prices, rather than oil, and allow clients to renegotiate the prices every two years.
“It (the deal) is a very welcome step if it is made a reality,” the head of Latvia’s public utilities commission, Rolands Irklis, told Reuters. “It would give Latvia a direct access to the European markets even if (it) is not directly connected to the infrastructure,” he said.
Aigars Kalvitis, head of gas utility Latvijas Gaze, which is partly owned by Gazprom, said the settlement could help it negotiate more favourable terms for its long-term Russian gas contracts, which expire in 2030.
Slovakian gas utility SPP said Gazprom had already scrapped curbs on cross-border trade and shown more flexibility on pricing in recent years.
The pledges could further boost integration on gas markets, a spokesman said, leading to “higher energy security”. The EU member states where Gazprom has allegedly engaged in anti-competitive behaviour are Poland, Estonia, Latvia, Lithuania, Bulgaria, Hungary, Slovakia and the Czech Republic. The eight governments and industry players have until May 4 to lodge objections to the proposal in the final chapter of a case which began with raids on offices in 10 countries in 2011.
A spokeswoman for the European Commission declined to comment ahead of the EU executive’s final assessment, saying there “no formal deadline” for its decision.
Its complex, politically-charged investigation has played out against the backdrop of tense relations since the EU imposed sanctions on Russia over the annexation of Crimea in 2014 and the subsequent conflict in east Ukraine, as well as deep disagreements over the Syrian civil war.
Brussels officials have repeatedly said they want to reduce the EU’s reliance on Russian gas.

Moscow argues the antitrust case is politically motivated — something denied by Brussels.
With a settlement, however, Russia would accept EU authority in applying competition law — something it has long balked at.
If it fails to abide, the EU could still impose fines.

In the five years since the EU began its antitrust probe, Gazprom has shifted its strategy under pressure from increased competition from LNG imports, price arbitration cases brought by Western customers and more liquidity on Europe’s energy markets.
It abandoned some of its most contentious practices and sold stakes in some gas pipelines in response to new EU energy rules.
Gazprom “is offering new trade tools, adapting and perfecting the contract model in accordance with our clients’ needs,” Elena Burmistrova, who heads its export arm, wrote in an industry publication earlier this year.
Some EU diplomats have questioned the Commission’s decision to pursue a case against US tech giant Google that will likely lead to hefty fines while settling with Russia’s gas exporter.
Poland has threatened to take the European Commission to court if it settles on a deal that its state-run energy company PGNiG called “far from enough”. PGNiG estimates it has been losing almost $1bn per year from buying Russian gas at oil-linked prices but reselling it at hub-linked prices.

Others say the settlement is too little, too late — particularly in the Baltic states and Czech Republic, which have taken their own steps to break Gazprom’s supply monopoly.
The Czech Republic, for example, has been buying Norwegian gas for several years.
“We have done the homework,” Czech energy security ambassador Vaclav Bartuska told Reuters. “You can only force your supplier to behave if he knows you have alternatives‎…fines and investigations can alleviate the situation for some time but are not a permanent solution.”
After Lithuania broke Gazprom’s supply monopoly by opening a Liquefied Natural Gas terminal in 2014, it won a 20% discount on Russian gas supplies.
Since 2015, it has been trading gas with Estonia and plans to include Latvia this year.

“Gazprom no longer has meaningful levers for influence in the Baltic states,” the head of its state-owned gas network operator Dalius Misiunas said.
Latvia, meanwhile, regards Gazprom’s settlement pledges as simply agreeing to abide by existing EU energy rules rather than making meaningful concessions, said Olga Bogdanova, head of energy at the economics ministry.
Despite the cautious optimism from bigger market players, traders and smaller clients said Gazprom’s concessions came with too many strings attached, such as restrictions on time, volume, location and fees for gas swapping.
“What kind of commitment is this, if I have to walk through fire to use them?” one executive in the Baltics said. “These commitments do not cost Gazprom anything…Gazprom should be punished.”
For Bulgaria, almost wholly dependent on buying Russian gas under a contract that runs until 2022, the stakes are high and the clock’s ticking.
A speedy deal is the priority for the EU’s poorest nation.

The country’s independent energy regulator said it hoped a settlement would allow to renegotiate contracts pegged to oil prices before next winter.
If not, it said hot water and heating bills would rise by up to 35%, squeezing households and industries.

Lebanon has started exploration of oil and gas at its offshore energy reserves in the Mediterranean waters disputed by the Israeli regime.

Lebanon’s Energy and Water Minister Cesar Abi Khalil said in a televised statement that the exploration project for the country’s first oil and gas reserves began on Tuesday after Lebanese officials approved a plan submitted by a consortium of France’s Total, Italy’s Eni and Russia’s Novatek.

Khalil expressed hope that Lebanon would launch the second phase of offshore licensing by the end of 2018 or early 2019.

The announcement came after months of tensions between Lebanon and Israel over the disputed energy reserves.

No immediate reaction has been observed on the part of Israeli officials.

In December 2017, the Lebanese government granted licenses to a consortium of three international companies to carry out exploratory drilling in Lebanon’s Block 4 and Block 9 territorial waters and determine whether they contain oil and gas reserves.

Israel lashed out at the three international firms for making “a grave error” by accepting the offer. Israeli minister of military affairs Avigdor Lieberman warned that Lebanon would “pay the full price” should another war erupt between the two sides.

Lebanon, however, was quick to respond to the blatant threat, with Energy Minister Abi Khalil pledging that Beirut was going to push ahead with its exploration plans.

Lebanese President Michel Aoun also vowed to use all the diplomatic powers vested in him to resolve the dispute, saying the country had a right to “defend its sovereignty and territorial integrity by all means available.”

The territorial dispute between Israel and Lebanon runs over 776 square kilometers (300 square miles) of waters claimed by both sides.

The underlying Levant basin of the Eastern Mediterranean has been proven to contain large natural gas reserves and maybe even crude oil.

Israel itself has long been developing a number of offshore gas deposits in the Mediterranean Sea, with the Tamar gas field, with proven reserves of 200 billion cubic meters, already producing gas, while the larger Leviathan field is expected to go online in the coming months.

A source close to Israeli Prime Minister Benjamin Netanyahu said in 2012 that Israel’s natural gas reserves were worth around $130 billion. A Businessweek estimate later that year put the reserves’ value at $240 billion.

Israel relies heavily on gas. According to estimates by the Israel Natural Gas Lines, the Israeli-occupied Palestinian territories consumed around 9.5 Billion Cubic Meters (BCM) in 2016. The number is expected to reach 10.1 BCM in 2018.

The latest standoff between the US and Iran may be leaving oil-tanker owners in more of a bind than in previous years. As the US reimposes sanctions on the Islamic Republic, firms that help ferry Iranian oil risk losing access to the American financial system, similar to earlier in the decade when such measures were enforced. Additionally, this time around, they’ll have to contend with being cut off from the booming business of transporting crude pumped from shale fields in Texas or wells in the Gulf of Mexico, according to shipbroker Braemar ACM.
The US is shipping record amounts of crude following the end of an export ban in late 2015, a few months after Iran and world powers reached a deal that eased sanctions on the Middle East nation in exchange for curbs on its nuclear programme. After President Donald Trump pulled out of that accord earlier this month, the jump in American shipments is making tanker owners consider whether to stick with or shy away from the Gulf state.
“If you’re an operator of young, modern tonnage that can berth and lift cargoes from the US, you won’t want to be exposed to Iran,” said Anoop Singh, an analyst at Braemar ACM. “Vessels associated with Iranian oil are likely to be banned from US oil trade for about two years – and this would matter more now that the US exports its crude oil.”

Shipowners will have to make a decision – to transport Iranian oil and petroleum products or shun dealings with Opec’s third-largest producer – at a time when they are trying to revive their business after years of malaise from a global oversupply of ships and thin margins. They are also facing higher expenses from looming regulation seeking to lower emissions.
While the US may not currently feature among the biggest clients of some shipowners, few can afford to turn their backs to a market from which both exports of crude as well as refined fuel are rapidly rising. With more shale oil finding its way to the Gulf Coast for exports, or being diverted to domestic refineries to make products that are shipped abroad, more tankers of different classes are seen being drawn in to American ports.

“With a spike in exportable US crude and fuel comes a push to move more barrels faster,” Singapore-based Singh said in an interview. “This has encouraged more dredging works at shallower harbours, supporting demand for everything from small oil-product carriers to supertankers with the capability of carrying 2mn barrels of oil to destinations as far away as Asia.”
For instance, China – the world’s biggest oil importer – purchased about 3.9mn metric tonnes of crude from the US in the first three months of 2018, eight times higher than imports in the first quarter of 2017, according to customs data.

When Saudi Arabia and Russia announced a new policy to revive oil production last week, one thing was missing: most of the other partners in their grand coalition.
With oil supplies tightening and prices soaring, the two countries agreed to restore some of the output they halted as part of an accord with 22 other producers, drawn from the Organization of Petroleum Exporting Countries and beyond. The trouble is, officials from several countries in the agreement, both inside Opec and outside, said they disapproved of the proposal to raise output and saw difficulties in reaching a consensus when they meet in Vienna next month.
“It might be a contentious meeting,” said Ed Morse, head of commodities research at Citigroup Inc in New York.

The matter is particularly sensitive because Russia and Saudi Arabia are proposing raising production to make up for losses from other members, notably a worsening slump in Venezuelan supply and a potential drop in Iran as renewed US sanctions kick in. Those countries have nothing to gain from looser output caps, and plenty to lose if oil prices extend Friday’s steep decline.

Most nations in the agreement weren’t consulted about the Saudi-Russia policy to revive output. Suhail al-Mazrouei, UAE Energy Minister and current holder of Opec’s rotating presidency, said the group as a whole will decide whether to adjust output.
“No decisions made by two countries or three countries are going to be taken,” he said in an interview in St Petersburg, Russia, on Friday after meeting with his Saudi and Russian counterparts. “We respect all the member countries.”
Saudi Arabia and Russia could simply go ahead with their plan without the blessing of other players. Because they’re the only countries capable of increasing production significantly, the impact on the market would be almost as great if they chose to go it alone.
“If the rest are not on board, Saudi will do it alone, so it’s not much of a choice,” said Roger Diwan, an analyst at consultant IHS Markit Ltd in Washington.

Yet the success of the 24-nation alliance that agreed to the supply cuts seems to be valuable to the kingdom, and so they may prefer a more diplomatic route by seeking consensus. If so, it would be a tough sell.
Though they’re not always enforced, Opec’s rules do require policy changes be approved by all members – many of which would lose out in this case. Outside the Arab members in the Arabian Gulf, most countries aren’t able to boost supplies and would face lower revenue if prices slide further.

US oil futures fell 4.5% to $67.50 a barrel in New York on Friday. That’s the biggest drop in almost a year, erasing most of the gains for May.
In Venezuela, which lobbied hard to set up the 2016 accord, output has plunged to the lowest level since the 1950s as a spiralling economic crisis batters its oil industry. Losing further earnings could accelerate its financial collapse.
Iran, a long-standing political antagonist of Saudi Arabia, faces the prospect of losing customers to its rival as renewed US sanctions – imposed after President Donald Trump quit an agreement on the country’s nuclear programme – force buyers to reduce purchases.
It could be that the production increases aren’t substantial enough to need much consultation within the group, according to Helima Croft, chief commodities analyst at RBC Capital Markets LLC. The lower end of the range the producers are discussing – a return to levels agreed at the outset of the deal – is just a few hundred thousand barrels a day above current output.
“I strongly believe that we will find a compromise, because all countries are interested in a stable market,” Russian Energy Minister Alexander Novak said in a Bloomberg television interview in St Petersburg on Friday.

Bloomberg/Kuwait
Opec and allied oil producers including Russia concluded that the crude market re-balanced in April, when their collective production cuts achieved a key goal of draining the surplus in global stockpiles.
The excess in oil inventories, which has weighed on prices for three years, plunged in April to less than the five-year average for stockpiles in developed nations, according to people with knowledge of the data assessed at the meeting of the Joint Technical Committee of Opec and other producers last week in Jeddah, Saudi Arabia.

The committee, known as JTC, determined that stockpiles held by developed nations dropped to about 20mn barrels below their five-year average, for a total decrease of about 360mn barrels since the start of 2017, three of the people said, asking not to be identified because the JTC discussions were private. The decline was due to producers’ greater adherence to their pledged output cuts – their compliance rate reached 152% in April – and to summer demand for crude and refined products, according to the people. The JTC meeting precedes the producers’ main gathering next month in Vienna, where they will evaluate the results of output cuts they’ve been making since January 2017. With supplies from Iran and Venezuela now at risk, speculation abounds that the Organization of Petroleum Exporting Countries and its allies may ease the cutbacks.

Top producers Saudi Arabia and Russia have said that Opec and other suppliers may boost output in the second half of the year, prompting a slide in prices which had reached $80 a barrel for the first time since 2014.
The producers have so far relied on measuring stockpiles in countries of the Organization of Economic Co-operation and Development by looking at the moving 5-year average. At the meeting in Jeddah, the JTC reviewed other ways to assess oil inventories. One option is to look at a longer-range, a 10-year average from 2004 to 2014, while another is to use the five-year average but exclude data from 2015 and 2016 because those were years of abnormally large stockpiles, the people said.
The International Energy Agency said on May 16 that Opec and its allies have finally succeeded in clearing a glut, with inventories falling below their five-year average for the first time since 2014. However, Saudi Arabia and Russia have both said the five-year average is flawed. Years of excessive supplies mean that measure is itself higher than normal, while the patchy nature of data outside the OECD makes it difficult to make an accurate assessment of the world market.

“Il s’agit clairement d’une nouvelle tentative de limiter une source d’approvisionnement différente afin que le gaz naturel liquéfié (GNL) américain puisse atteindre l’Europe plus facilement, sans concurrents”, explique-t-il à l’AFP sous couvert d’anonymat.

“Je ne crois pas que ce soit le but principal des sanctions contre l’Iran, mais c’est un effet induit”, nuance Marc-Antoine Eyl-Mazzega, directeur du centre Energie de l’Institut français des relations internationales (IFRI).

“Il est clair que les investissements prévus ne vont pas avoir lieu. Je ne connais pas de grande société internationale qui va s’y risquer”, a-t-il pronostiqué dans un entretien téléphonique avec l’AFP.

Au grand dam des Européens, Washington a annoncé réimposer les sanctions levées dans le cadre de l’accord multilatéral conclu en 2015 en échange de l’engagement de Téhéran à geler son programme nucléaire.

Les Etats-Unis menacent Téhéran des sanctions “les plus fortes de l’Histoire” si les Iraniens refusent leurs conditions pour conclure un “nouvel accord” englobant leur programme de missiles balistiques.

Les entreprises européennes qui continueront de faire affaire en Iran dans des secteurs interdits par ces sanctions “seront tenues responsables”, a averti le chef de la diplomatie américaine, Mike Pompeo.

-“Réserves faramineuses”-

L’annonce du possible désengagement d’Iran du géant pétrolier Total et de plusieurs autres entreprises européennes ont été au coeur des récents entretiens à Téhéran du commissaire européen à l’Energie Miguel Arias Canete.

“Les Iraniens doutent de la capacité des Européens à ne pas plier face aux intérêts américains”, a confié à l’AFP M. Canete au terme d’une série de rencontres avec le vice-président iranien Ali Saheli, le chef de la diplomatie Mohammad Javad Zarif et les ministres du Pétrole et de l’Energie.

A ce jour, la moitié du gaz acheté est russe, mais les Européens cherchent à briser cette dépendance.

“Les réserves iraniennes sont faramineuses et si l’Iran développe les installations adéquates, elles peuvent permettre à ce pays de devenir un important pourvoyeur (…) pour l’Europe”, plaide M. Canete.

Téhéran possède les plus importantes réserves gazières au monde après la Russie, avec notamment le gisement off-shore de Pars Sud. Elle sont estimées à 191 trillions de m3. Le pays a exporté 10 milliards de m3 en 2017 par gazoduc vers la Turquie et l’Irak. Mais la solution pour l’avenir sera le GNL, transporté par méthaniers, soulignent les responsables européens.

Le ministre du Pétrole, Bijan Namdar Zanganeh, a chiffré les besoins en investissements à quelque 200 milliards de dollars sur cinq ans. Le secteur de l’énergie a fourni 50 milliards de dollars de recettes à l’Etat en 2017, selon les données européennes.

-La Russie ciblée-

L’UE n’est pas la seule dans le collimateur de Washington.

“Un autre concurrent visé est la Russie avec son projet phare Nord Stream 2”, observe le responsable européen.

La chancelière allemande Angela Merkel défend vivement ce projet de gazoduc stratégique.

“Pour le moment, le GNL américain est plus cher que le gaz russe. Nous avons un libre marché. Le GNL doit être compétitif”, estime-t-on de source gouvernementale allemande.

Mais “Nord Stream 2 n’aide pas à la diversification énergétique cherchée par l’Europe”, reconnaît de son côté le commissaire Canete.

“L’Europe veut développer une stratégie de gaz liquéfié afin d’assurer sa sécurité énergétique, et l’Iran est une source d’approvisionnement importante”, insiste-t-il à l’adresse des Etats-Unis.

DOHA (Reuters) – State energy giant Qatar Petroleum will push ahead with its production expansion and foreign asset acquisition strategy to be on par with oil majors, despite a regional political and economic embargo on Doha, its chief executive said.

QP, which produces 4.8 million barrels of oil equivalent per day (boed), aims to boost its output to 6.5 million boed in the next 8 years, and is expanding its upstream business abroad, particularly in the United States, CEO Saad Al-Kaabi told Reuters.

Qatar is one of the Organization of the Petroleum Exporting Countries’ smallest producers but is also one of the most influential players in the global liquefied natural gas (LNG) market due to its annual production of 77 million tonnes.

“We are in Mexico, we are in Brazil, we are contemplating investing in the U.S. in many areas, in shale gas, in conventional oil. We are looking at many things,” Al-Kaabi said in an interview at QP’s headquarters in Doha.

“We are looking very critically at the United States because we have a position there. We have the Golden Pass that we are investing in,” he said.

Qatar Petroleum is the majority owner of the Golden Pass LNG terminal in Texas, with Exxon Mobil Corp and ConocoPhillips holding smaller stakes.

Al-Kaabi said “depending on the project’s cost and feasibility” he expects to take a final investment decision on expanding the Golden Pass LNG by the end of the year.

“I’m not in the business of infrastructure. I’m not going to have a liquefaction plant only. It has to be something that will be linked with an upstream business that we would buy in the U.S. so we need to be naturally hedged,” he added.

To maintain its dominance in the United States and Australia, QP is cutting costs at home and seeking to expand overseas through joint ventures with international companies.

QP is focusing on other opportunities in Mexico, Latin America, Africa and in the Mediterranean, he said. QP is also looking to enter Mozambique, where Exxon and Eni operate, he added.

Al-Kaabi said the share of overseas upstream production will be “a good portion” in the long-term but it won’t compare to its share at home.

“Our strategy says we are going to expand in upstream business with a little bit of downstream that will be connected to some other businesses that we are doing and a few one-off deals in petrochemicals,” he said.

PRODUCTION EXPANSION

For Qatar, which is locked in a dispute with four Arab states, broadening its investments outside the Middle East would cement its position as the world’s largest LNG supplier and help it to weather the boycott with its neighbors.

In June last year, Saudi Arabia, the United Arab Emirates, Bahrain and Egypt cut diplomatic, economic and transport ties with Qatar, accusing it of backing terrorism, a charge which Doha denies.

Qatar has lifted a self-imposed ban on the development of the North Field, the world’s biggest natural gas field, which it shares with Iran, in April last year and announced a new project to develop its southern section, increasing output in five to seven years.

The announcement came at a time of an oversupply in the LNG market, but Al-Kaabi said such a glut would disappear in 2021-2022 driven by the rising demand for gas amid the global move towards cleaner fuels and climate change concerns.

QP has selected Japan’s Chiyoda Corp for the front-end engineering and design (FEED) of the onshore facilities of the North Field expansion project and awarded McDermott a contract for the offshore engineering work, Al-Kaabi said.

QP has abandoned plans to debottleneck its existing liquefaction trains because it involved shutdowns and prompted safety concerns, and opted to build three new LNG trains, he said.

“Stay tuned,” Al-Kaabi said, when asked if QP’s announcement that the award to Chiyoda included a pre-investment for a fourth train as had been announced.

If QP decided to build a fourth train, that could mean possibly expanding gas production beyond 100 million tonnes per year.

Al-Kaabi said QP will award the engineering, procurement, and construction (EPC) contract for the first LNG train by the end of next year, with its start-up set for the end of 2023.

QP is in talks with international oil companies for the new expansion project. Oil companies operating in Qatar now include Exxon, Total and Royal Dutch Shell.

QP will make a decision on the foreign partners by the end of 2018, Al-Kaabi said.

“There are some new companies that have come and put forward some proposals … but I don’t see the face of what we are doing and the companies that we have changing much.”

AFP
L’Arabie saoudite et la Russie, qui s’entendent depuis 2017 avec d’autres gros producteurs de pétrole pour limiter l’offre, ont jugé possible
vendredi une hausse de la production à partir du troisième trimestre alors que les prix sont remontés récemment à leurs plus hauts niveaux
depuis 2014.

Cité par les agences russes lors d’un forum économique à Saint-Pétersbourg, le ministre saoudien de l’Energie Khaled al-Faleh a jugé que les
pays producteurs auront “bientôt la possibilité de libérer l’offre”. “Comme nous l’avons toujours dit, le retour du pétrole sur le marché doit
se faire progressivement. Nous ne le ferons pas rapidement. Cela interviendra probablement au deuxième semestre de cette année”, a-t-il
ajouté. “Si nous arrivons à l’idée commune qu’il est indispensable d’assouplir le niveau (de production, ndlr), cela doit se faire à partir du
troisième trimestre”, a estimé de son côté le ministre russe Alexandre Novak.

Après ces propos, les prix du pétrole reculaient d’environ 2% sur les marchés.
Les deux hommes se sont entretenus jeudi soir pour discuter du sujet alors que l’Opep et ses dix partenaires, dont la Russie, doivent se
réunir fin juin à Vienne.

Les 14 membres de l’Opep et dix autres producteurs de pétrole, Russie en tête, ont conclu fin 2016 un accord pour baisser le niveau de
production de 1,8 million de barils par jour afin de réduire l’excédent d’offre de brut sur le marché et soutenir les prix.
L’accord de limitation — qui court jusqu’à la fin 2018 — a permis de réduire l’abondance de l’offre et de pousser les prix vers le haut, le baril
remontant autour de 80 dollars contre 30 dollars en janvier 2016.

ST PETERSBURG/DUBAI (Reuters) – Saudi Arabia and Russia are discussing raising OPEC and non-OPEC oil production by some 1 million barrels a day, sources said, weeks after U.S. President Donald Trump complained about artificially high prices.

Riyadh and Moscow are prepared to ease output cuts to calm consumer worries about supply adequacy, their energy ministers said on Friday, with Saudi Arabia’s Khalid al-Falih adding that any such move would be gradual so as not to shock the market.

Raising production would ease 17 months of strict supply curbs amid concerns that a price rally has gone too far, with oil having hit its highest since late 2014 at $80.50 a barrel this month.

Trump tweeted last month that OPEC had “artificially” boosted oil prices.

“We were in the meeting in Jeddah, when we read the tweet,” OPEC Secretary General Mohammad Barkindo said, referring to a meeting in Saudi Arabia on April 20.

“I think I was prodded by his excellency Khalid Al-Falih that probably there was a need for us to respond. We in OPEC always pride ourselves as friends of the United States,” Barkindo told a panel with the Saudi and Russian energy ministers in St. Petersburg at Russia’s main economic forum.

OPEC officials said by “the need to respond” Barkindo was referring to a tweet he sent the same day, rather than the need to act.

The Organization of the Petroleum Exporting Countries and allies led by Russia have agreed to curb output by about 1.8 million barrels per day (bpd) through 2018 to reduce global stocks, but the inventory overhang is now near OPEC’s target.

In April, pact participants cut production by 52 percent more than required, with falling output from crisis-hit Venezuela helping OPEC deliver a bigger reduction than intended.

Sources familiar with the matter said an increase of about 1 million bpd would lower compliance to 100 percent of the agreed level.

Barkindo also said it was not unusual for the United States to put pressure on OPEC as some U.S. energy secretaries had asked the producer group to help lower prices in the past.

Oil prices fell more than 2 percent toward $77 a barrel on Friday as Saudi Arabia and Russia said they were ready to ease supply curbs.

NEAR TARGET
Russian Energy Minister Alexander Novak said current cuts were in reality 2.7 million bpd due to a drop in Venezuelan production – somewhere around 1 million bpd higher than the initially agreed reductions.

Novak declined to say, however, whether OPEC and Russia would decide to boost output by 1 million bpd at their next meeting in June.

“The moment is coming when we should consider assessing ways to exit the deal very seriously and gradually ease quotas on output cuts,” Novak said in televised comments.

Initial talks are being led by the energy ministers of OPEC kingpin Saudi Arabia and Russia at St. Petersburg this week along with their counterpart from the United Arab Emirates, which holds the OPEC presidency this year, the sources said.

OPEC and non-OPEC ministers meet in Vienna on June 22-23, and the final decision will be taken there.

Current discussions are aimed at relaxing record-high compliance with the production cuts, the sources said, in an effort to cool the market after oil hit $80 a barrel on concerns over a supply shortage.

China has also raised concerns about whether enough oil is being pumped, according to a Saudi statement issued after Energy Minister Falih called China’s energy chief on Friday to discuss cooperation between their countries and to review the oil market.

Nur Bekri, administrator of China’s National Energy Administration, told Falih he hopes Saudi Arabia “can take further substantial actions to guarantee adequate supply” in the crude oil market, the Saudi Energy Ministry statement said.

While Russia and OPEC benefit from higher oil prices, up almost 20 percent since the end of last year, their voluntary output cuts have opened the door to other producers, such as the U.S. shale sector, to ramp up production and gain market share.

The final production number is not set yet as dividing up the extra barrels among deal participants could be tricky, the sources said.

“The talks now are to bring compliance down to the 100 percent level, more for OPEC rather than for non-OPEC,” one source said.

RALLY CONCERNS
OPEC may decide to raise oil output as soon as June due to worries over Iranian and Venezuelan supply and after Washington raised concerns the oil rally was going too far, OPEC and oil industry sources told Reuters on Tuesday.

However, it is unclear which countries have the capacity to raise output and fill any supply gap other than Gulf oil producers, led by Saudi Arabia, and Russia, the sources said.

“Only a few members have the capability to increase production, so implementation will be complicated,” one OPEC source said.

So far, OPEC had said it saw no need to ease output restrictions despite concerns among consuming nations that the price rally could undermine demand.

The rapid decline in oil inventories and worries about supplies after the U.S. decision to withdraw from the international nuclear deal with Iran, as well as Venezuela’s collapsing output, were behind the change in OPEC’s thinking.

NYC/Cours de clôture: Les cours du pétrole ont lourdement chuté vendredi à New York et Londres alors que l’Arabie saoudite et son allié russe ont estimé “probable” un assouplissement des limitations de la production de brut.
Le baril de Brent de la mer du Nord pour livraison en juillet a terminé à 76,44 dollars sur l’Intercontinental Exchange (ICE) de Londres, en baisse de 2,35 dollars par rapport à la clôture de jeudi.

Sur le New York Mercantile Exchange (Nymex), le baril de “light sweet crude” (WTIWTI Le West Texas Intermediate (WTI), aussi appelé Texas Light Sweet, est une variation de pétrole brut faisant office de standard dans la fixation du cours du brut et comme matière première pour les contrats à terme du pétrole auprès du Nymex (New York Mercantile Exchange), la bourse spécialisée dans l’énergie.) pour la même échéance a lâché 2,83 dollars à 67,88 dollars.

Face à la hausse marquée des prix ces derniers mois, l’Organisation des pays exportateurs de pétrole (OPEP) et ses partenaires pourraient assouplir leur accord de limitation de la production, ce qui a pesé sur les prix vendredi.

Cité par les agences russes lors d’un forum économique à Saint-Pétersbourg, le ministre saoudien de l’Energie Khaled al-Faleh a jugé que les pays producteurs auront “bientôt la possibilité de libérer l’offre”.

“Comme nous l’avons toujours dit, le retour du pétrole sur le marché doit se faire progressivement. Nous ne le ferons pas rapidement. Cela interviendra probablement au second semestre de cette année”, a-t-il ajouté.

“Si nous arrivons à l’idée commune qu’il est indispensable d’assouplir le niveau (de production, ndlr), cela doit se faire à partir du troisième trimestre”, a estimé de son côté le ministre russe Alexandre Novak.

“La Russie est sans doute en faveur de l’assouplissement des règles depuis longtemps. Mais c’est la première fois que l’Arabie saoudite s’exprime aussi clairement sur une hausse de la production”, a commenté James Williams de WTRG.

Ryad “veut un prix du baril proche de 70 dollars et ne veut pas qu’il monte à 90 dollars pour ne pas pénaliser les consommateurs”, a ajouté M. Williams.

Puits de pétrole

L’Arabie saoudite, premier exportateur mondial, est particulièrement observée par les marchés alors que l’offre mondiale est entravée par les baisses de production au Venezuela et pourrait l’être encore plus par les sanctions américaines contre ce pays et contre l’Iran.

“Le déclin de la production de l’OPEP nous pousse à penser que les réserves mondiales vont baisser au deuxième et au troisième trimestre 2018”, ont jugé les analystes de Société Générale, qui ont revu à la hausse leurs prévisions de prix pour le Brent, à 80 dollars au troisième trimestre.

L’avenir de l’accord de limitation de la production devrait être au coeur de la prochaine réunion de l’OPEP et de ses partenaires, fin juin à Vienne.

Le ministre saoudien a affirmé qu’il rencontrerait ses homologues de l’OPEP, et qu’il aurait l’occasion de se réunir avec M. Novak une ou deux fois avant la réunion de Vienne.

L’Arabie saoudite et la Russie sont deux des trois plus grands producteurs de pétrole au monde, avec les États-Unis.

La chute des prix a par ailleurs été accélérée par la publication vendredi d’un indicateur avancé de la production américaine, à savoir le nombre hebdomadaire de puits de pétrole actifs aux États-Unis.

Celui-ci a augmenté de 15 unités à 859 puits, suggérant une poursuite de la hausse de la production américaine, qui enchaîne actuellement les records d’après les rapports hebdomadaires de l’Agence américaine d’information sur l’Energie (EIA).