Russia plays spoiler, exceeds Saudi oil output

28 May 2009

Russia, which was once a welcome guest at OPEC meets, has lost that status after it pumped more oil than the group's biggest exporter, Saudi Arabia taking away some of its market share.

Russia flirted with the OPEC when the cost of oil had plummeted below $40 a barrel. It is now boosting production to support its economy which is now in recession for the first time in a decade. OPEC is meanwhile left shouldering the burden of record output cuts.

According to oil industry sources OPEC members have cut almost 4 million barrels a day to subsidise the Russian oil industry and economy by around $150 million per day.

They point out that this would not be to the liking of OPEC member countries scheduled to meet in Vienna on Thursday. The OPEC is expected to continue with the cuts in hopes of a rally in oil prices on rising demand, regardless of the present swollen stocks and sluggish demand.

While senior Russian government officials have attended the past few OPEC meets and the largest independent oil firm Lukoil has indicated willingness to cut output, Russian oil production has continued to rise. It rose in April to 9.85 million bpd which exceeded its February production of  9.72 million bpd .

Saudi Arabia, meanwhile has been pumping less than 8.05 million bpd since February taking the bulk of the burden of oil production cutbacks.