Quiet diplomacy among oil majors unlikely to lead to action on output
Meetings may be a sign of increased pressure for Opec, especially Saudi Arabia, to cut production
Quiet diplomacy among the world's biggest oil producers has heated up this week, yet observers see few signs that renewed discussion among Russia, Saudi Arabia, Venezuela and others will lead to action on output.
On Wednesday, Russia's Deputy Prime Minister Arkady Dvorkovich said Moscow has been holding "unprecedentedly active" consultations with the Organisation of the Petroleum Exporting Countries (Opec) and Latin American producers. The energy minister said he had spoken to Opec's secretary general several days ago.
Saudi state news agency SPA reported on Tuesday that Saudi Arabian oil minister Ali al-Naimi discussed oil markets with Russia's ambassador to Riyadh, Oleg Ozerov.
Although there is no indication the diplomatic huddles were in any way related, the meetings may be a sign of stepped-up pressure for Opec - and specifically Saudi Arabia - to move toward cutting production when it next meets on June 5.
Nearly four months of sub-US$60 a barrel crude oil prices weighed heavily on cash-strapped producers such as Venezuela and Russia, who failed to coax Opec into cutting output last November.
"Until and unless I hear a producer say they're willing to contribute cuts, I think this is all about trying to spook or shame Saudi Arabia into doing what it has steadfastly said it will not - cut unilaterally," says Bob McNally, president of The Rapidan Group energy consultancy.