Russia and Saudi Arabia, the two largest crude exporters, have agreed to cooperate on oil markets. The Energy Ministry in Moscow said the country has no immediate plans to limit output to reverse plunging prices.
The two countries agreed that the oil market “must be free of attempts to influence it for political and geopolitical reasons,” Russian Foreign Minister Sergei Lavrov told reporters in Moscow today after a meeting with his Saudi counterpart. Oil exporters “have a right to take measures to correct these non-objective factors.”
Oil collapsed into a bear market this year as the U.S. pumps crude at the fastest rate in more than three decades amid signs of weakening demand. Russia and Saudi Arabia together account for about 25 percent of global output.
While the Russian government has discussed a cut, it has no current plans to reduce output to arrest the decline, according to Energy Minister Alexander Novak. It hasn’t made a final decision because the economy is heavily dependent on oil revenue, he said today in Moscow.
“We expect annual oil production levels of 505 to 520 million now and in the future,” Novak said.
Output of 505 million metric tons is equivalent to about 10.1 million barrels a day, while Saudi Arabia’s output last month was 9.75 million barrels a day last month, according to Bloomberg estimates. Oil and gas account for more than half of Russia’s budget revenue.
Saudi Arabia is the biggest producer in the Organization of Petroleum Exporting Countries, which meets Nov. 27 in Vienna to discuss its production ceiling.
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