OPEC and Russia alliance 'will not be formal organisation'
OPEC and Russia alliance 'will not be formal organisation'
A draft document shows OPEC and Russia are refraining from setting up formal organisation, opting instead for "mechanism".
2 min read
The Headquarters of OPEC in Vienna, Austria. [Getty Images]
The Organisation for the Petroleum Exporting Countries (OPEC) and top oil producer but non-member Russia will not create a formal combined body as originally planned, Reuters has reported.
In a draft document, the countries said they aim to set up an alliance rather than a formal organisation when they meet on April 17-18 in Vienna.
The draft document also steers clear of sensitive issues such as oil prices and production cuts.
It details the objectives of the alliance, which include setting up "an intergovernmental platform to facilitate dialogue" and strengthening "collaboration in the formulation of policies aimed at promoting oil market stability".
The decision to "set up a mechanism" instead of a formal organisation could be in reaction to US anti-cartel legislation, known as NOPEC, passed through a US House of Representatives committee last week. Whether the legislation will be considered by the full chamber is as yet unclear.
OPEC Secretary-General Mohammad Barkindo said the exporting group was not in the business of manipulating or fixing oil prices, when asked on Monday about the US House of Representatives bill.
In a deal made at the end of 2016, OPEC's regular members joined forces with other countries - most notably Russia - to scale back output in a bid to reduce a glut that was weighing on prices.
The move to cut production was criticised by US President Donald Trump, who urged OPEC to keep the taps open in order to push prices down.
The coordinated move by the so-called "OPEC+" - who together account for more than half of the world's oil output – stimulated a long rally in oil prices right up until October 2018.
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