Moscow believes the new arrangement it proposes would provide stability for the oil market through a period of high demand during the northern hemisphere summer, the person said. Saudi Arabia has been discussing different scenarios that would raise production by between 500,000 and 1 million barrels a day, according to people familiar with the matter. "Not good!" the president said.
OPEC and non-OPEC producers are meeting in Vienna on June 22 to discuss the supply situation.
OPEC on Tuesday said that the oil market outlook in the second-half of 2018 is highly uncertain and warned of downside risks to demand.
Oil prices have risen by around 60 per cent over the past year after the Organisation of the Petroleum Exporting Countries and some non-OPEC producers, including Russian Federation, started reducing supplies in 2017. Following the decision of U.S. President Donald Trump to leave the nuclear deal with Iran, many worldwide companies, including European companies, have started to reduce purchases of Iranian oil and pull out from oil and gas projects in Iran.
In the US, government data showed crude stockpiles declined by 4.14 million barrels last week, while in Libya armed clashes halted oil loadings at the country's biggest port.
The OPEC Basket price per barrel of crude oil is $74.11.
Oil ministry officials also said that with firm oil prices, a rising import bill, $450 billion of external debt, including oil-related debt, govternment's hands are tied and there is no scope for fuel price reduction. Despite their proposal, U.S. President Donald Trump on Wednesday slammed OPEC for inflating prices. "Procuring oil at the cheapest price is vital for the two energy hungry Asian consumers".
This could lead to a supply gap in crude late next year if OPEC can't make up for lost production, the IEA said in its monthly report Wednesday. With record amounts of Oil all over the place, including the fully loaded ships at sea.
Brent futures for August settlement traded at $76.49 a barrel on the London-based ICE Futures Europe exchange, down 25 cents.
The group's Vienna meeting next week would be a "crunch time" for OPEC, Warren Patterson, a commodities strategist at ING Groep, said in an emailed note Wednesday.
The 14-country bloc's next meeting is June 22, when ministers will gather in the Austrian capital amid speculation that Saudi Arabia may push for more flexibility on production quotas in anticipation of sustained declines in Venezuela and the impact of U.S. sanctions on Iran.