EMEA News
Russia Resolves to Talk with Saudi Arabia About OPEC Oil Output
Nikolai Tokarev, head of Russia's oil pipeline monopoly Transneft, is said to have caused oil futures to increase over 5 percent after stating that his country is ready to talk with the Organization of the Petroleum Exporting Countries (OPEC) about output cuts, media reports.
In describing a January 26 meeting in Moscow between the nation's oil executives and government officials, Tokarev said "there was discussion in particular about the oil price and what steps we should take collectively to change the situation for the better, including negotiations within the framework of OPEC as a whole, and bilaterally."
He added, "The main initiative is being shown by, of course, our Saudi partners; they are the main negotiators.
"That means that they are the ones we need to discuss this with first of all."
This dovetails with Leonid Fedun, vice president of OAO Lukoil, this week telling state news agency Tass that at current prices it would be better to preserve oil fields at optimum working levels than push Russian output to new heights.
A Russian energy ministry representative confirmed with Reuters that participants in the Moscow meeting "discussed the possibility of coordination of actions with OPEC members amid unfavourable market conditions on the global oil market."
Russian oil producers have argued that reducing output is technically difficult and could mean losing market share to competitors, but Brent crude rose by over $2 to $32.95 a barrel immediately following Tokarev's comments – although demand following the Northeast US blizzard was also cited as causing the boost.
While Russia has repeatedly flirted with the idea of engaging in talks with OPEC, Iranian officials have expressed doubt that any policy changes will occur.
