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Gazprom Wants OPEC and Partner Production Cuts Ended

Monday, June 17, 2019

With crude oil prices hanging around the low $50 per barrel mark for light crude trading in the US, and Brent and OPEC per barrel prices in the low-to-mid $60s, Russian oil and gas firm Gazprom Neft is calling on OPEC and its partners to increase production. Gazprom Neft’s chairman Alexander Dyukov was cited by Reuters as saying flows needed to increase to keep the market well supplied and prices reasonable.

Dyukov’s statement echoes the Russian government’s reluctance to agree to an extension to the production cuts it participates in as proposed by Saudi Arabia previously.

Dyukov said a price range of between $55 and $65 per barrel was “acceptable” for Russian oil producers, adding that Gazprom Neft would be able to quickly step up production once the cuts are eliminated.

Russian president, Vladimir Putin, speaking to reporters said roughly the same thing. He stated that his country was more comfortable with lower oil prices than Saudi Arabia. There is also the issued that with Russia participating in the OPEC and partner countries’ production cuts, the US is sliding in and taking up Russia’s market share.

“Does it make sense (for Russia) to reduce (oil output) if the U.S immediately takes (our) market share?” Sechin said. “We have to defend our market share.” The executive went on to say in an article on OilPrice that Rosneft would demand compensation from the Russian government if the cuts were extended.


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