OPEC and its allies will probably extend their oil-cuts agreement later this year to keep prices at “comfortable” levels, Azerbaijan’s energy minister told Bloomberg.
“It’s realistic that the decision might have to be extended,” Parviz Shahbazov said in an interview. The deal struck in December, which saw OPEC and its partners agree to remove 1.2 million barrels a day through the first half of 2019, has helped lift crude prices 15 percent this year.
Azerbaijan, an OPEC partner, agreed to reduce output by 20,000 barrels a day in the first half and may open the taps in the second if the deal isn’t extended, maintaining annual production, Shahbazov said. Output is projected to grow by as much as 30,000 barrels a day by 2021, according to the minister.
For now, prices are “comfortable,” Shahbazov said. “If the price settles in the $60 to $70 corridor, it will be very positive for our economy, for our plans,” and is “the best price for producers and consumers.”
Azerbaijan is the largest oil producer in the former Soviet Union after Russia and Kazakhstan. It sees no need to become a member of OPEC, according to Shahbazov, who said the country had taken “an active part in the process” of reaching the oil-cuts deal.