Russia supports the reduction of oil production by all countries in the world and there will be more to cut production for the welfare of the countries, to avoid international agreements on the balancing of production, but receiving excess profits at the expense of others. This is the result of an online discussion “Oil war: I can not agree to give up” at the club “Valdai”.
on March 6 it was announced about the termination from 1 April the agreement on the reduction of oil production between OPEC and non-cartel countries (OPEC+).
“We believe only OPEC+ cannot participate in the rebalancing of the oil market”, — said Deputy Minister of energy of Russia Pavel Sorokin the online discussion.
According to the energy Ministry, the proposal by Saudi Arabia to cut production by 1.5 million barrels a day would be “a drop in the bucket” in terms of the pandemic and the unpredictable global economy, so Russia did not support the proposal. According to estimates of the Ministry of energy, the effect of coronavirus in the fall in the price of oil is $25 and OPEC+ could raise the price of only $5-7.
Now the price of U.S. benchmark WTI traded on the market at a price of $20-22, and lancelike need at least $40.
as a result, production in the US will decline. “We forecast a decline somewhere in the 1.5 million barrels by the end of the year at an oil price of $30-35, in the range of $30-40 per barrel. For the price of 25, these rates can be accelerated,” — said Sorokin.
this agreement was not part of the US, which during the three years of the agreement increased production volumes, which never happened in the country. In the end the US came in first place in the world in terms of production.
While Russia, Saudi Arabia, the largest oil suppliers in the world – has reduced oil production for the sake of price stability, the oil and gas industry in the US has reached a new stage due to the increased prices. During this time, U.S. shale production has held on the market place gone with oil market participants toAlenia OPEC+, said earlier in an interview to “Russia 24” the head of “Rosneft” Igor Sechin. From the United States “10 times, for example, increased sales to India, in 6 times – to Europe,” he said.
In the United States during this time they built a modern infrastructure TEK – new terminals, 9 new export pipelines, and the U.S. economy received a new impulse of growth.
“You look at what happened during these three years of our participation in the agreement. The rapid growth of the US oil industry, which came in first place in the world in oil production. This has never happened before,” said Sechin in an interview with TV channel “Russia 24”.
a New international agreement to reduce oil production to reduce its surplus in the market and maintain prices will be possible only with the participation in the agreement much larger number of countries, such as USA, Norway, Brazil, Mexico, which policylevel production and received swappable at the expense of others.
Since early March, oil prices fell 2 times. The country’s oil Alliance OPEC+ are unable to agree on reducing oil production, nor of the extension of the previous conditions. As a result, from April 1 removed restrictions on the extraction of the countries-participants of the transaction.
the Price of oil will rise to $50-60 per barrel by the end of this year at decrease of production of shale oil in the United States, said Sechin. “A number of companies associated with oil shale extraction, already cease to exist. And this will lead to a new balance,” – said he in an interview to “Russia 24”.