In riposte to Riyadh, Russia says ready to ramp up oil output

Wed Apr 20, 2016 6:12pm EDT
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By Olesya Astakhova, Denis Pinchuk and Dmitry Zhdannikov

MOSCOW (Reuters) - Russia said on Wednesday it was prepared to push oil production to historic highs, just days after a global deal to freeze output levels collapsed and Saudi Arabia threatened to flood markets with more crude.

Venezuela predicted prices could crash in the next few weeks if producers failed to resume dialogue and urged that non-OPEC participants be observers at a June OPEC meeting, as the specter of oversupply loomed once more.

OPEC member Venezuela and top non-OPEC producer Russia had been the main proponents of the output freeze deal, in the making since February, until it collapsed on Sunday in Doha after Riyadh said it would not sign unless Iran took part.

The deal had been meant to help the market rebalance by removing a large chunk of oversupply and a stockpile glut.

But Saudi Arabia said it could jack up output instead - by as much as 2 million barrels a day to over 12 million, which would allow it to overtake Russia as the world's largest producer.

"They (Saudis) have the ability to raise output significantly. But so do we," Russian Energy Minister Alexander Novak told journalists on the sidelines of an international energy conference in Moscow.

He said Russia was "in theory" able to raise production to 12 million or even 13 million bpd from current record levels of close to 11 million bpd.

Russian oil output has repeatedly surprised on the upside over the past decade, rising from as low as 6 million bpd at the turn of the millennium. Oil experts have repeatedly predicted an unavoidable decline but it has yet to happen.   Continued...

(L-R) Venezuela's Oil Minister and President of the Venezuelan state oil company PDVSA Eulogio del Pino, Lukoil Chief Executive Officer Vagit Alekperov, Russia's Deputy Prime Minister Arkady Dvorkovich, Head of Russian Union of Industrialists and Enterpreneurs Alexander Shokhin and Bashneft Executive Director Alexander Korsik attend a plenary session of the National Oil and Gas Forum in Moscow, Russia, April 20, 2016. REUTERS/Sergei Karpukhin