Saudi Arabia and Russia signal at extending oil cuts into 2018 to eliminate crude surplus

Saudi Arabia and Russia signalled they could extend production cuts into 2018, doubling down on an effort to eliminate a supply surplus just as its impact on prices wanes.

In separate statements just hours apart on Monday, the world’s largest crude producers said publicly for the first time they would consider prolonging their output reductions for longer than the six-month extension widely expected to be agreed at the OPEC meeting on May 25.

Ministers from some members of the Organisation of Petroleum Exporting Countries have also discussed the possibility of deepening the supply curbs, said four delegates, who asked not to be identified because the talks were private. The delegates didn’t say that the discussions resulted in any kind of agreement for additional cuts.

Russia is ready to support extending the oil deal beyond 2017, the nation’s Energy Ministry said. “We are discussing a number of scenarios and believe extension for a longer period will help speed up market rebalancing,” Minister Alexander Novak said in a statement.

Speaking in Kuala Lumpur earlier Monday, his Saudi counterpart Khalid Al-Falih said he was “rather confident the agreement will be extended into the second half of the year and possibly beyond” after talks with other nations participating in the accord.