Russia says the opportunity still exists for an increase in crude oil production days after proposals tabled to freeze output at January levels. Photo by Oskari Porkka/Shutterstock
MOSCOW, Feb. 18 (UPI) -- A move to freeze crude oil production at January levels still leaves room for production growth from Russia this year, the deputy energy minister said.
As of January, Russian Deputy Energy Minister Kirill Molodtsov said oil production was 1.9 percent higher than last year.
"We have a tendency of production growth, and we can retain it," he was quoted by Russian news agency Tass as saying. "It is possible to increase production in connection with the introduction of new fields."
Russia's economy is among those facing pressure from the slump in crude oil prices, which are off roughly 70 percent from peaks above $100 per barrel in mid-2014. According to the latest report from the Organization of Petroleum Exporting Countries, Russia faces a real risk of lingering recession.
Russian Prime Minister Dmitry Medvedev said the economy is starting to adapt to the new reality brought on by lower crude oil prices.
"The economy is gradually, although it is incurring certain expenses, adjusting to the new external economic conditions," he said.
Crude oil prices are lower in part because supplies far outweigh demand. A recent study from analysis group Wood Mackenzie found production has yet to drop off dramatically in response to lower crude oil prices. Less than 0.1 percent of global production has been halted so far globally, its report found.
Wood Mackenzie finds about 3.4 million bpd, about 3.5 percent of the total global oil supply, is cash-negative with Brent at $35 per barrel. Brent traded at just over $35 per barrel in early Thursday trading.
The Russian deputy energy minister's comments on production came two days after the government said it agreed with Saudi Arabia, Qatar and Venezuela to freeze oil production at January levels, provided "other manufacturers join the initiative."