Russia hints towards talks of truce to stabilise oil market
With Saudi Arabia showing no sign of relenting, Russia on Tuesday dropped the first hint that it was ready for a truce to end the raging oil price war. Speaking to a Russian television channel, Energy Minister Alexander Novak said Moscow has not closed the doors for talks with OPEC.
"If necessary, we have various tools including reduction and increasing production. We have planned the next meetings in May or June to assess the situation on the market," Novak said, adding that new agreements can be reached.
Russia refused to agree to a proposal by OPEC ministers led by Saudi Arabia for a drastic cut of 1.5 million barrels per day, with Russian oil companies fearing loss of market share and of competitiveness against US shale production.
Saudi Arabia responded on Sunday with the biggest cut in its prices of the past 20 years in a bid to win market share. Saudi Aramco said on Tuesday that it will boost its supply of crude oil to 12.3 million barrels per day in April, flooding markets as it escalates a price war with Russia.
In response, Novak said Russia could also swiftly increase its production. "We have potential for growth in production. In the short-term we can increase by 200-300,000 barrels (per day) with the prospect of 500,000 barrels, that’s in the near future," he said adding that Russia is competitive on the world markets because of low production costs.
The Rosneft factor
Rosneft, the largest oil producer in Russia, may press the Russian government to keep out of the OPEC deal. The firm has in the past complained about output restrictions imposed by the government