EMEA News
Russia Prepared to Push Oil Output to Historic Highs
Russia says it is prepared to push oil production to "historic highs" following the collapse of oil freeze talks in Doha.
Speaking to journalists Wednesday at an energy conference in Moscow, Russian Energy Minister Alexander Novak was quoted by Reuters as saying that the country was "in theory" able to increase production to 12 or 13 million barrels per day (bpd) from current production levels of about 11 million bpd.
The comment comes at a time when Saudi Arabia and Iran have also threatened to up production and flood the already oversupplied market.
However, some doubt whether Russia has the capacity to increase production much beyond current levels; Saudi Arabia's oil minister Ali al-Naimi has "long argued that Russian output would soon fall because of ageing fields," according to the report.
Nevertheless, the report notes that experts have repeatedly "predicted an unavoidable decline [in Russian production]," but such a decline has yet to happen and that Russian production has "repeatedly surprised on the upside over the past decade," rising from a production low of six million bpd around 2000 to 11 million bpd today.
Meanwhile, Lukoil Chief Executive Vagit Alekperov says oil has hit bottom and expects prices to hold at around $50 per barrel this year.
Venezuelan Oil Minister Eulogio Del Pino, however, believes another crash in on the cards unless a cap is placed on production.
"I anticipate that, without a deal, prices from now to OPEC will drop and it's not the same to sit down at the table with Brent at $43 per barrel as it is when it's below $30," he said.
"We are close to 90 percent of inventory levels already. We could see a steep fall in oil prices in the next few weeks."
Del Pino is not the only figure fearing a return of $30 oil; In the immediate aftermath of the Doha talks, Natixis oil analyst Abhishek Deshpande said "Prices could touch $30 a barrel within days."
Bunker buyers should however note that this predicted price crash never came, and the average IFO380 bunker price across 20 primary bunkering ports tracked by Ship & Bunker (the Global 20 Ports Average*) has risen from $190.50 per metric tonne (pmt) on Monday to $199 pmt on Thursday.
* Global 20 Ports Average is the linear average of the following 20 major bunkering ports: Busan, Colombo, Durban, Fujairah, Gibraltar, Hong Kong, Houston, Istanbul, LA/Long Beach, Las Palmas, Mumbai, New York, Panama, Piraeus, Rotterdam, Santos, Shanghai, Singapore, St Petersburg, Tokyo.
