OPEC and non-OPEC countries are committed to bringing global oil inventories down to the industry's five-year average, Saudi Energy Minister Khalid al-Falih said May 31, adding he saw the target being reached in the very near future.
Speaking in Moscow after a meeting between OPEC and Russia, Falih and his Russian counterpart Alexander Novak also said they saw their cooperation in oil markets lasting after the current joint oil output agreement expires in March next year.
"Our joint declaration with Russia concluded that while the rebalancing goal is on its way to being achieved, more needed to be done to draw inventories towards the five-year average," Falih said.
In addition, OPEC Secretary-General Mohammad Barkindo said May 31 that the current cooperation between OPEC and non-OPEC nations will outlive the present oil output cut deal, as well.
"We believe this cooperation is in the best interests of both consumers and producers," Barkindo said on a visit to Moscow. "We do not expect a divorce in this marriage," he added. "It is like a Catholic marriage."
Falih reiterated his country's position to do "whatever it takes" along with Russia to help stabilize the oil market, signalling an open-ended policy to reduce the inventory overhang and balance the market.
"It is necessary to work out new framework principles for continued steady cooperation between OPEC and non-OPEC even after the expiration of the Vienna agreements," Novak said May 31.
Last December, Russia and 10 other non-OPEC nations agreed to join OPEC's output cuts for the first time in 15 years. Last week, OPEC and non-members led by Moscow agreed to extend cuts in output by a further nine months to March 2018.
Oil prices dropped more than 4% after the decision as the market had been hoping oil producers could reach a last-minute deal to deepen the cuts or extend them further, until mid-2018. On May 31, global benchmark Brent crude futures were down 52 cents at $51.32 a barrel by 3:38 a.m. CT (8:38 GMT).
Both Moscow and Riyadh said cooperation would continue beyond the current agreement as both countries were still trying to find ways to co-exist with U.S. shale oil producers, which are not part of the global output reduction deal.
"I attended a meeting of the Saudi and Russian leadership at the Kremlin during which both our nations renewed their determination to rebalance the global crude oil market in the interest of greater market stability and restated our commitment to doing whatever it takes to attain those goals," Falih said.
President Vladimir Putin met with Deputy Crown Prince Mohammed bin Salman on May 30 in Moscow where both hailed their growing partnership in oil markets and dialogue on Syria in a departure from past hostilities between the top global producers and major players in the Middle East.