Russia cautious on prospects for oil cut deal with OPEC

“We take the position that our oil sector is, to a significant extent, private, and is commercially minded, it is not under the direct control of the state. Our market is governed by the decisions of individual companies, and that is how it will continue,” Dvorkovich said (File Photo: AP)

Russian Deputy Prime Minister Arkady Dvorkovich on Friday played down expectations that Russia could coordinate with OPEC to arrest the fall in oil prices by reducing production, saying the state would not intervene to balance the market.

Oil prices have jumped over the past 48 hours after Russian energy officials said they had received proposals from OPEC lynchpin Saudi Arabia on managing output, and were ready to talk.

But Dvorkovich, whose portfolio includes overseeing the energy sector, sounded a more measured tone when he spoke at a news briefing in Moscow on Friday.

“We take the position that our oil sector is, to a significant extent, private, and is commercially minded, it is not under the direct control of the state. Our market is governed by the decisions of individual companies, and that is how it will continue,” he said.

“If prices are at a low level for an extended period of time, a correction in investment will become inevitable and that will lead to a certain reduction in output, but that will not be a deliberate act by the state.”

Energy Minister Alexander Novak also took a cautious approach on the outcome of any negotiations between the Organization of the Petroleum Exporting Countries (OPEC) and oil exporters outside the grouping.

“We’re ready to discuss the issue of cutting oil output volumes, but this isn’t a decision,” Novak said in an interview with Bloomberg.

“We’re ready to consider the possibility. This should be a consensus. If there’s a consensus, it makes sense, if not, it’s not.”

Novak was reflecting the challenges of reaching a deal between OPEC on one hand, and on the other hand Russia and Iran, which are both outside OPEC and have strong reasons for keeping oil exports high, at least for now.

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Last Update: Wednesday, 20 May 2020 KSA 09:45 - GMT 06:45
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