Russia proposes a mechanism to monitor crude oil exports

More than 30 ministers from oil-producing nations are expected to attend an energy summit this week in Moscow.
By Daniel J. Graeber Follow @dan_graeber Contact the Author   |  Oct. 3, 2017 at 8:04 AM
share with facebook
share with twitter

Oct. 3 (UPI) -- Ministers from the Organization of Petroleum Exporting Countries attending a conference in Moscow may take up export monitoring, Russia's energy minister said.

Russian Energy Minister Alexander Novak said he expected around 30 ministers from OPEC and non-OPEC producers to show up for a five-day conference in Moscow, which began Tuesday. Before they arrived, he said a mechanism to monitor oil exports could be added to agenda.

"At the latest meeting we agreed to monitor oil exports," he was quoted by Russian news agency Tass as saying. "This is a new instrument, which has not been clearly formed yet, which is why I think it will be one of the main issues on the discussion agenda from the viewpoint of export control mechanism."

Russia is party to a committee monitoring overall compliance to an agreement enacted in January that was designed to drain the five-year surplus in global crude oil inventories with managed production declines.

Calculations from commodity pricing group S&P Global Platts show total Russian oil production for August was down 337,000 barrels per day from the 11.24 million barrels per day in October, the month that OPEC uses to gauge compliance. That means, by Platts' estimates, Russia is 112 percent in compliance.

OPEC Secretary General Mohammad Sanusi Barkindo told those gathered at a regional energy conference in Singapore last week that, at least in terms of growth expectations for demand in the Asia-Pacific, exports from Middle East producers are on pace to rise.

"Crude exports from the Middle East to the Asia Pacific region are expected to increase by 7.5 million barrels per day between 2016 and 2040, rising from 14.5 million barrels per day to 22 million barrels per day," he said. "So, for the foreseeable future, we can count on the Asia-Pacific region to be the primary outlet for OPEC and Middle Eastern export barrels."

Defense over market share could complicate efforts to enact a committee to keep track of exports. Iran last year said it was keen on defending a strong market share in an effort to make up for losses incurred by Western economic sanctions.

Production is relatively easy to monitor, at least in part because of reporting by producers and secondary sources to OPEC economists. Tracking exports, however, would require monitoring tanker traffic, loading schedules and other freight issues.

In the United States, the U.S. Energy Information Administration publishes weekly data on domestic crude oil exports. The Joint Organizations Data Initiative publishes export metrics, though the most recent data are from July.

Related UPI Stories
Trending Stories