New Delhi: The fall in global oil prices may bring the world’s largest oil producer Russia and oil cartel Opec together to control the freefall as Kremlin today said low crude oil prices were hurting the oil producers who have budgeted their investment at $70-90 per barrel prices.
Russian energy minister Sergei Shmatko said Russia was looking at coordinating investments and policies with Organisation of Petroleum Exporting Countries (Opec) to get a grip over the markets even as it plans to form a cartel of gas producers with Iran and Qatar.
“We cannot rule out cutting down of production,” he said when asked if Kremlin was looking at cutting oil production, just like Opec, to shore up crude oil prices which have fallen from USD $per barrel in July to around $50 a barrel currently.
He blamed the freefall of crude oil prices to recession in major economies and speculation in the oil market.
Even after Opec cut oil production by 1.5 million barrel, crude prices have fallen 7%. “Today’s oil prices are not determined significantly by traditional parameters of demand and supply but it is under effect of whole financial crisis and speculation,” he said.
“Russia will cooperate with Opec to defend its interest. We want to understand the process involved and protection mechanism.”
Russia, which is targeting to produce 480-490 million tonnes of crude oil in 2009, was keen on exchange of information on market developments and investment programmes with Opec.