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News // Middle East and OPEC

Russia stirs oil production proposal pot

18 November 2016 , 12:05Daniel J. GraeberNeftegaz.RU775

Talks over production levels are expected to yield positive results, including any talks with Iranian representatives gathered in Doha, Russian minister Novak said on November 17, 2016.

 

Russian Energy Minister Alexander Novak is visiting Doha to attend a two-day summit of the Gas Exporting Countries Forum.

Major oil producers like Russia could use the Doha meeting as a preliminary forum to review efforts to hold output steady under the terms of a proposal offered in September by the OPEC in Algeria.

Speaking on the sidelines of the meetings Thursday, Novak said he expected a good outcome from outreach that could involve representatives from Iran.

«We expect the talks to be productive,» he was quoted by Russian news agency Tass as saying.

Iranian officials have said little about the GECF forum or possible production arrangements. Trade officials in Tehran said they expected a Russian delegation to arrive there to discuss the potential for signing oil contracts with Iranian firms.

 

OPEC may be counting on non-member states like Russia to hold production levels steady in an effort to pull the energy market back into balance. Data from the United States show the market there continues to be oversupplied and, for OPEC, production is already above the high-end of the ceiling proposed in Algeria.

Novak on September 5 met on the sidelines of a summit for the members of the Group of 20 economies in China to discuss with Saudi Oil Minister Khalid al-Falih ways to reverse a slide in crude oil prices.

In a joint statement, both sides said the onus was on them, as two countries that combine to meet about 20 % of the global demand for crude oil, to coordinate on ways to address widespread volatility in oil prices.

Crude oil prices are relatively unchanged from September 5 at around $47 per barrel, though prices moved above $50 on production rumors between then and now.

 

Russia's position on the production proposal has been fluid.

Novak's deputy, Kirill Molodtsov, said a 5 % cut in production was «technically» possible based on discussions with oil companies over the last year.

About a week the September meetings in Algeria, Novak said there were no considerations for a cut in output from Russia.

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