ISTANBUL, Turkey, Oct. 10 (UPI) — Russia media reported Monday the country is in line to join an oil production curtailment agreement proposed last month by OPEC members in Algeria.
A source from the Russian delegation to the World Energy Congress in Istanbul told state media agency Tass the country was on board with the proposal.
“Russia is going to vow support for the OPEC’s decision to freeze and even downscale output and to declare the intention to join the measure,” the source was quoted as saying.
Members of the Organization of Petroleum Exporting Countries met with ministers from other producing nations in Algeria to review the appetite for taking extraordinary action to stimulate crude oil prices, which remain about 50 percent below levels from two years ago.
OPEC at the late September meeting said it would look toward a production targetranging between 32.5 and 33.0 million barrels per day in order to narrow the gap between supply and demand with the aim of pulling crude oil prices higher.
Even though no formal action has been taken, crude oil prices are up 15 percent since the late September proposal. Data from the United States, however, show declining levels of oil storage, suggesting other factors are already bringing the market back toward balance.
The Algerian accord comes as crude oil production accelerates. Less than a week after the arrangement was put forward, Russian oil company Rosneft said oil production from a field in the Far East could increase by as much as 20 percent next year.
Production for the second quarter for Rosneft was 4.1 million barrels of oil per day, an increase of 0.5 percent from the previous period. Total hydrocarbon production was up 0.2 percent from the first quarter and 0.7 percent year-on-year.
Russia’s position on oil production has been fluid. Before the Algerian meeting, Russian Energy Minister Alexander Novak it wasn’t critical to make a formal arrangement to steer prices as the market would take care of itself.
With exemptions in place for emerging oil players like Libya, some backers of the Algerian accord said the role of non-OPEC producers was essential for its effectiveness. Russia isn’t a member of OPEC and Novak in early September issued a joint statement with Saudi Oil Minister Khalid al-Falih that said the onus was on them, as two countries that combine to meet about 20 percent of the global demand for crude oil, to coordinate on ways to address widespread volatility in oil prices.
