Jan. 16 (UPI) -- The situation on the market, not the price of oil, determines Russia's appetite for complying with the OPEC balancing act, the country's energy minister said.
Russia is among the handful of producers party to the Organization of Petroleum Exporting Countries playing a role in the multilateral effort to balance an oversupplied market for crude oil with coordinated cuts in output. Russia is also the largest non-OPEC contributor and a member of a joint committee monitoring compliance.
Geopolitical risk, global energy demand forecasts and the late 2017 decision by OPEC to extend the deal for another year helped push crude oil prices to four-year highs. That's led to some concern that parties to the agreement could cheat in order to capitalize on the 4 percent spike in crude oil prices so far this year.
Brent crude oil closed above $70 per barrel Monday for the first time in four years. Russian Energy Minister Alexander Novak said Tuesday that price wasn't driving compliance, however.
"We look at the balance of demand and supply in the first instance," he was quoted as saying by Russian news agency Tass. "Prices are not the main factor for us."
The deal, coordinated more than a year ago and implemented in January 2017, aims to drain the surplus on the five-year average in crude oil inventories by sidelining about 2 percent of global demand for oil.
In September, before the agreement was reached to extend the deal through 2018, Novak told Austria's Die Presse newspaper that a shorter extension may be preferred because of supply and demand dynamics
"It's better to end the agreement during the growing demand period," he was quoted as saying. "It usually takes place in summer. When the demand will grow, everyone should gradually withdraw from the agreement."
Demand usually softens during the waning months of the year in part because of smaller drains from the transportation sector, which usually draws most from the energy sector.
The joint monitoring committee said compliance in November, the last full month for which OPEC published data, was 122 percent for its highest level since implementation. Commodity pricing group S&P Global Platts reported total OPEC production in December was slightly higher than during the previous month.
The next meeting for the monitoring committee, with Saudi Arabia and Russia as co-chairs, is Jan. 21 in Oman.