Russia co-ordinating with OPEC to check oil price fall
26 Nov 2008
With the sharp fall in global oil prices hitting oil producers hard, Russia, the second largest oil producer after Saudi Arabia, announced that it would take steps along with OPEC to co-ordinate production to check the free fall in oil prices.
Russian energy minister Sergei Shmatko said Russia was considering evolving policies jointly with OPEC to shore up prices. Shmatko was speaking at the India-CIS Roundtable on Hydrocarbons.
Russia is also planning to form a gas cartel with Iran and Qatar, he said. According to Schmatko cutting back production to support crude oil prices that have fallen from $147 to $50 was very much an option being considered by OPEC. He attributed the price slide to recession in major economies and speculation in the oil market.
With the recessionary trends and all-round market skepticism, Shmatko said 2009 will likely be a difficult year for oil markets. He added that there may be a further fall in oil prices that may be significant.
Meanwhile, OPEC has already cut production following prices falling to a third of their July levels. Declining global demand has left an oversupply of 1 million-barrel-a-day that needed to be removed by end 2008 according to Venezuela's oil minister Rafael Ramirez.
