Putin: Rus­sia ready to join OPEC out­put curbs

Kuwait Times - - BUSINESS -

Pres­i­dent Vladimir Putin yes­ter­day said non-OPEC mem­ber Rus­sia was ready to work with the car­tel in im­pos­ing mea­sures to limit oil pro­duc­tion, in com­ments that pro­pelled the price of crude to its high­est lev­els in a year. Eyes have turned to Rus­sia, the world’s top oil pro­ducer along­side Saudi Ara­bia, to see if it will join in a con­certed ef­fort along­side car­tel mem­bers to prop up prices after OPEC last month agreed a sur­prise out­put cut in the hope of lift­ing rock-bot­tom prices.

Putin said at the World En­ergy Congress in Is­tan­bul that such co­or­di­nated out­put curbs were the only way to bal­ance the mar­ket after a pro­longed pe­riod of low prices. In re­sponse, Brent North Sea crude rose $1.53 to $53.45 a bar­rel, the high­est level reached since Oc­to­ber 2015.

“In the cur­rent sit­u­a­tion, we believe a freeze or a cut­ting of the pro­duc­tion of oil is the only way pre­serve the sta­bil­ity of the en­ergy sec­tor and ac­cel­er­ate a re­bal­anc­ing of the mar­ket,” Putin said. “Rus­sia is pre­pared to join joint mea­sures lim­it­ing pro­duc­tion and calls on other ex­port­ing coun­tries to do the same,” he added.

He ex­pressed hope this would lead to a con­crete agree­ment at a Novem­ber OPEC meet­ing and that this idea would be a “pos­i­tive sig­nal to the mar­ket and in­vestors”. Rus­sian En­ergy Min­is­ter Alexan­der No­vak is ex­pected to at­tend an in­for­mal meet­ing of OPEC en­ergy min­is­ters in Is­tan­bul to­mor­row in a sign of in­creas­ingly tight co­op­er­a­tion with the car­tel. The pe­riod of low oil prices has been hugely dam­ag­ing to economies like Rus­sia which has failed over the last years to re­duce its de­pen­dence on hy­dro­car­bon ex­ports for rev­enues.

Putin raised alarm that if the cur­rent trend of low prices con­tin­ued, it could lead to a “chronic” lack of fi­nanc­ing in the sec­tor which could in turn lead to un­pre­dictable flare-ups in prices. “Rus­sia as prom­i­nent en­ergy power will al­ways make its con­tri­bu­tion to sta­ble de­vel­op­ment,” he said, in­sist­ing that even in the cur­rent dif­fi­cult times Rus­sia was still in­vest­ing in oil ex­trac­tion. Putin is mak­ing his first trip to Tur­key fol­low­ing a cri­sis sparked by the shoot­ing down of a Rus­sian war plane over the Syr­ian bor­der last Novem­ber. He will later hold talks with Pres­i­dent Re­cep Tayyip Er­do­gan.

$60 oil not un­think­able’

The en­ergy min­is­ter of OPEC king­pin Saudi Ara­bia, whose as­sent al­lowed the out­put cut to go ahead, mean­while ex­pressed cau­tious op­ti­mism the price of crude could rise to $60 a bar­rel by the end of the year. “We are see­ing the con­ver­gence of sup­ply and de­mand,” said Khalid Al-Falih. “It is not un­think­able we could see $60 (a bar­rel) by the year end.” Oil has for months pres­sured by con­cerns of slack de­mand amid a global eco­nomic slow­down at a time of a glut in sup­ply in par­tic­u­lar in the United States. But this min­is­ter warned OPEC against the temp­ta­tion of dras­tic out­put cuts to push up prices. — AFP

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