MOSCOW (Reuters) - Russia is evaluating an earlier and smaller oil production cut proposal made by OPEC and its allies, energy minister Alexander Novak said, adding it had not received one for deeper cuts.
The Organisation of Petroleum Exporting Countries and its partners known as OPEC+ will meet in Vienna on March 5-6 to discuss additional steps to support markets hit by demand fears over spread of coronavirus.
In an initial response to counter the impact of the virus on the oil market, an OPEC+ committee recommended the group deepen its output cuts by 600,000 bpd, in addition to existing cuts of 1.7 million bpd which runs to the end of March.
“We are looking at the recommendation made by the (joint) technical committee,” Novak told reporters, adding that Russia had not received a proposal to deepen cuts by 1 million bpd. The committee meets again this week.
As oil prices fell below $50 per barrel last week, their lowest since July 2017, Saudi Arabia and some other OPEC members proposed to deepen the cuts by another 1 million bpd to address demand fears hit by the coronavirus outbreak, sources said.
Russia, which has a history of initially resisting proposals only to join a deal at the last moment, is yet to say whether it will support additional joint cuts. On Monday, oil prices recovered to above $50 on hopes for new deal.
Novak said he still planned to attend a set of meetings in Vienna starting on Wednesday or to discuss possible future steps with his partners via a conference call.
“We will be taking a decision over possible measures ... in any case and format,” he said. Novak declined to spell out Russia’s position. Two sources told Reuters that the meetings were still planned in Vienna, as scheduled.
On Sunday, Russian President Vladimir Putin met oil companies to exchange views over the coronavirus impact on the global oil prices but not to take any specific decisions, the Kremlin said earlier on Monday.
On Sunday, Putin indicated he favoured joint action but underlined that the current oil price level was acceptable to Moscow, signalling that Russia’s input may be limited.
With over $500 billion in state coffers, Putin said Russia was protected from the oil price fall but “this does not set aside the need for action, including together with foreign partners”.
Separately on Monday, Russian energy ministry said that oil output stood at 11.29 million bpd in February, largely flat month on month, Interfax reported, but did not provide a breakdown on oil and gas condensate output.
From late last year Russia was allowed to exclude gas condensate, a form of light oil, from its quota under the existing OPEC+ deal but it continues to report a combined figure with no breakdown.
Russia’s current oil production quota stands at 10.33 million bpd excluding gas condensate. The energy ministry did not reply to a Reuters request asking for a breakdown.
Reporting by Olesya Astakhova, Writing by Alexander Marrow and Katya Golubkova; Editing by Kirsten Donovan and David Evans