OPEC's Barkindo says warmer ties with Russia haven't changed decision-making process for oil supplies

Key Points
  • OPEC Secretary-General Mohammed Barkindo plays down suggestions that OPEC's decision-making process has now changed.
  • OPEC+ reaches a deal to extend production cuts until March 2020.
Secretary General of OPEC, Mohammed Barkindo (R), Russia Energy Minister Alexander Novak (L), Saudi Arabia's Minister of Energy, Industry and Mineral Resources, Khalid Al-Falih (C) hold a joint press conference during the 173rd Ordinary Meeting of the Organisation of Petroleum Exporting Countries (OPEC) in Vienna, Austria on November 30, 2017.
Omar Marques | Anadolu Agency | Getty Images

OPEC Secretary-General Mohammed Barkindo said Tuesday that while his relationship with Russia is "strong," the decision-making process at OPEC hasn't fundamentally changed.

The oil-producing cartel has officially agreed to extend production curbs until March 2020 and has also formalized a charter to strengthen its alliance with non-OPEC producers — most notably Russia.

The deal appears to have been rubber-stamped before OPEC's Vienna meeting when Russian President Vladimir Putin and Saudi Arabian Crown Prince Mohammed Bin Salman met at the G-20 summit in Osaka, Japan, over the weekend.

That has led to some suggestion that OPEC's new charter is now ignoring the voice of original member countries in order to keep Moscow happy. Barkindo told CNBC's Dan Murphy in Vienna on Tuesday that in fact member countries were pleased by Moscow's interventions.

"The Russian federation has been a reliable and dependable bridge between OPEC and non-OPEC," Barkindo said.

The OPEC leader said his organization had worked with Russian officials to "literally rescue" the oil industry from a downturn and many had doubted that oil supply caps could ever hold.

"There is now a very strong working bond between us and Russia, and this goes right up to the top, to the leadership," he said.

Barkindo says OPEC's bond with Russia goes 'right up to the top'
Barkindo says OPEC's bond with Russia goes 'right up to the top'

Barkindo added that it was "no surprise" that Putin and the crown prince would meet in Japan and use the opportunity to discuss oil strategy.

OPEC's secretary-general said despite Russia's influence, the decision-making process in OPEC is unchanged and still reflects the consensus of member countries.

Earlier Tuesday, Russian Energy Minister Alexander Novak said that any agreement between Russia and Saudi Arabia sent out a "good signal" to the wider market.

"Russia and Saudi Arabia are the world's largest producers and exporters of energy resources, oil in particular, so it is very important that our two nations have a common understanding of the market situation," Novak told CNBC's Dan Murphy.

Novak said Tuesday that Iran is not the cause of instability in the Persian Gulf and that sanctions against the country are "unlawful."