Wow, I've mentioned that several times in the past week: already the deal to extend production cuts seems to be faltering. From the article:
Russia’s largest oil company has served notice that it will step up production in the event of a sudden end to the agreement among major crude producers to curb output in an effort to prop up prices.It's very, very important to parse the quote, and if I'm correct in parsing the quote, this is how I read it:
In a rare interview, Igor Sechin, Rosneft’s chief executive, said the company was closely monitoring output from US shale producers, amid debate in the oil market over whether the Opec-led agreement’s effectiveness is waning.
“Well, if the question is how Opec is going to exit from these arrangements: abruptly,” Mr Sechin said. “We will also be prepared. If something goes wrong, we will not let them occupy our markets. We’ll defend ourselves.”
- if global crude oil prices fail to rise with the extension, various OPEC countries may start to get nervous, at which point, it will be every Arab for himself, as OPEC countries race to save market share
- Russia will immediately begin increasing production if any OPEC country starts to take advantage of the quotas
It looks like the OPEC / non-OPEC deal is turning into a game of chess. And, if anyone knows how to play chess, it's the Russians.
Speaking of chess, Sophia will turn 3 years old later this summer: