More than a month after shocking the market by saying that Russia was ready to join OPEC’s efforts to reduce global oil supply, Russian President Vladimir Putin said that his country was ready to freeze production at “today’s level”, injecting more optimism that OPEC and non-OPEC producers might really pull off a deal.
Meanwhile, Russia announced on Monday that it is pushing back a meeting between President Vladimir Putin and Russian oil firms until December 19—well after the OPEC meeting in Vienna, scheduled for November 30. The meeting, which was supposed to discuss output curbs, was originally scheduled for November 23rd, a week prior to the OPEC meeting.
"The commission was postponed as the agenda is still being worked out. Work with Russian oil companies is being regularly carried out by the energy ministry. There are no separate meetings scheduled by the president," Kremlin spokesman Dmitry Peskov said.
Despite the meeting pushback, Russia is adamant that it still plans to curb output at current record levels.
“We have spoken on this matter before and have said that we are ready to freeze production at today’s level. We do not think that would create any problems for our energy sector. The Energy Ministry is in constant contact with the big energy companies, and they are ready to go ahead with this,” the Kremlin said, reporting Putin’s answers to reporters at the Asia-Pacific Economic Cooperation (APEC) forum.
Like the remarks of OPEC members’ leading oil officials in recent days, Putin also expressed optimism that a deal can be reached.
“I cannot say for certain whether they will reach an agreement or not, but I do think it highly probably that they will. As I see it, the main differences that existed between the OPEC countries, perhaps not all the differences, but the bigger ones at least, if they have not been already settled, they can be. As far as we understand the situation, there are no serious issues remaining,” Putin told the reporters at the APEC forum.
Despite Putin’s optimism, it would seem that Russia is pushing back their internal talks until it becomes clear that OPEC has successfully reached an agreement on November 30, and that any meeting of the oil minds in Russia before that time would be premature.
At least for non-insiders, Saudi Arabia, Iraq and Iran seem to still be at odds over whether the Saudis are going to do most of the heavy-lifting as the heavy-weight OPEC champ; whether OPEC’s secondary sources figures should be used as reference for freezes/cuts; and whether Iran and Iraq, or both, or none of them, should be exempt from cuts.
While Russia is waiting to see if OPEC’s biggest three – Saudi Arabia, Iraq and Iran – will be able to overcome differences, it has been ramping up oil output (possibly hedging against any freeze), with its production hitting a new post-Soviet era high at 11.2 million bpd in October.
By Tsvetana Paraskova for Oilprice.com
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