MOSCOW: Russia said on Tuesday it was open to renewing cooperation with the Opec oil cartel even as kingpin Saudi Arabia escalated a price war with Moscow by announcing it would flood markets with new supplies.

The oil price conflict broke out after Opec and a group of non-member countries dominated by Russia — the world’s second largest oil producer — on Friday failed to agree on production cuts.

Saudi Arabia, the world’s biggest crude exporter, responded by announcing unilateral price cuts. This prompted the oil price to plummet and fuelled huge drops on stock markets Monday.

On Tuesday, Saudi oil giant Aramco announced a plan to massively increase oil output despite falling demand during the novel coronavirus outbreak.

Russian Energy Minister Alexander Novak said on Tuesday that Moscow remains open to cooperation with Opec to stabilise the oil market.

“I want to say the doors aren’t closed,” Novak told the state-run Rossiya 24 television channel, hinting at the possibility of further talks.

Russia’s failure to reach agreement with the cartel “does not mean that in the future we can’t cooperate with Opec and non-Opec countries,” Novak insisted.

Kremlin spokesman Dmitry Peskov told journalists: “No one rules out such a possibility.” Aramco said Tuesday it would boost crude oil supplies to 12.3 million barrels per day in April in a move that will flood markets when current agreements expire.

The announcement “shows the Saudis have something to prove,” director of Britain-based RS Energy Bill Farren-Price said.

“This is a grab for market share.” Novak in turn said Russia could also swiftly increase its production.

“I think in the short-term we can increase by 200-300,000 barrels (per day) with the prospect of 500,000 barrels, that’s in the near future.”

Published in Dawn, March 11th, 2020