Russian President Vladimir Putin has no plans for direct engagement with members of OPEC on production proposals, his spokesman said. EPA/SERGEI ILNITSKY/POOL
MOSCOW, Nov. 28 (UPI) -- Russian President Vladimir Putin is deferring to his energy minister to discuss the potential for a production agreement with OPEC, his spokesman said Monday.
Russia is one of the few major oil producers considering an arrangement to coordinate on production levels that's not a member of the Organization of Petroleum Exporting Countries. The outcome of meetings this week in Vienna could make or break the momentum in crude oil markets since the collapse below $30 per barrel this year, though Putin himself is leaving the issue in the hands of Oil Minister Alexander Novak.
"Novak is dealing with it," Putin's spokesman Dmitry Peskov was quoted by Russian news agency Tass as saying.
OPEC members are looking to coordinate with non-members like Russia on a production arrangement designed to pull a market tilted toward the supply side back into balance. According to economists at OPEC, Russia is on pace to average about 11 million barrels of oil production per day this year, about 1.8 percent higher than last year. If accurate, Russian production for the year would be at or near a post-Soviet record.
The high end of the production ceiling proposed by OPEC, meanwhile, is below what the 14 member states are producing now, suggesting some cuts would be necessary. Putin said last week from the sidelines of an economic forum in Peru he was ready to "freeze production at today's levels."
Russia's position on the production proposal has been fluid. Novak's deputy, Kirill Molodtsov, said a 5 percent cut in production was "technically" possible based on discussions with oil companies in Russia over the last year. Novak, however, has said there were no considerations for a cut in output from Russia.
Russia's economy has come under pressure from lower crude oil prices. Elvira Nabiullina, the head of the Russian Central Bank, said she expected oil prices to hold around $40 per barrel for at least a few years, but it was unlikely that oil prices would collapse again.
The price for Brent crude oil, the global benchmark, was highly volatile in early Monday trading, but about 18 percent about Nabiullina's estimate.