Home / Industry / Energy /  Russia ready to discuss oil-price bands, output cuts with OPEC

Russia said it’s prepared to discuss crude- price ranges and output cuts when it meets with the Organization of Petroleum Exporting Countries next week.

“So far, we have not seen any proposals except for the one that concerns production cuts," Russia’s energy minister Alexander Novak told reporters in Astana, Kazakhstan on Thursday. “We are not ruling out altogether the possibility of discussing the issue, both with OPEC and non-OPEC countries."

Following a meeting with other oil producers in Vienna last November, Novak said Russia doesn’t have the ability to reduce or increase output quickly because of the harsh winters and complex geology at its Siberian fields. While previous attempts by Russia and OPEC to cooperate on cutting production have failed, the government is under increased budgetary pressure after the nation entered its first recession in six years.

Russia still believes production cuts are “inefficient" as they only result in short-term price gains, Novak said. “Any artificial price increases lead to investment inflows and, in turn, to price declines," he said.

As Russia’s central bank projects crude staying at $50 a barrel over the next three years, the nation is becoming increasingly concerned about competition with other major producers. Igor Sechin, chief executive officer of Russia’s largest oil producer OAO Rosneft, said on Tuesday that Saudi Arabia is “actively dumping" its supply and expanding in Europe, traditionally a key market for Russian exports.

Russia, which set a post-Soviet output record of 10.74 million barrels a day in September, plans to participate in technical consultations between OPEC and non-OPEC countries in Vienna on 21 October. Bloomberg

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