Russia is a crucial partner in addressing energy challenges and both sides are committed to stable oil markets, OPEC Secretary General Mohammed Barkindo said on October 24, 2016, in a speech before his meeting in Vienna with Russian Energy Minister Alexander Novak.
OPEC’s relationship with the Russian Federation was initially shaped in the early 1990s. In 1992, Russia was given observer status to the OPEC Conference, and in subsequent years it participated in many OPEC Ministerial Conferences. Moreover, during this period there were also technical exchanges and workshops organized and attended by both sides.
The OPEC-Russia Energy Dialogue was then itself formalized in 2005.
«Over the years, our bilateral cooperation with Russia has flourished, and we value the direct and open channels of communication that have evolved. The leadership role of the Russian Federation is crucial in combatting the current energy challenges that are often intertwined and complex in nature», said Mohammed Barkindo.
Some days before Alexander Novak said that freezing oil production would not be the central topic of the whole event. According to the Russian Energy Ministry, «the Energy Dialogue with OPEC will focus on prospects of oil market’s development, developing global energy in the context of implementing environmental obligations and development of technologies».
Speaking in Vienna, Novak said Russia was a responsible player on the oil market and an agreement in OPEC will allow talks to resume between producers inside and outside the cartel.
Novak said in Vienna that sharp falls in the price of crude threatened to trigger an oil deficit and unpredictable volatility in prices.
«That's why ... (an oil output) freeze or even a cut for a certain period of time is a right decision for global energy ... Being a short-term measure, an oil output cap may help to lower volatility in the market and make it more stable,» Novak said.
Neither Novak nor Barkindo said at which levels Russia could cap its production, which reached a record-high 11.1 million bpd in September.
Last month in Algiers, OPEC agreed modest oil output cuts. The goal is to cut production to a range of 32.50-33.0 million barrels per day (bpd).
