Representatives of the largest oil exporting countries highlight the burning issue on cutting oil output rates. According to the official stance, global crude surplus keeps prices below $50 a barrel. Only joint efforts can bring the oil market into balance.
However, the other side of the coin is that behind painstaking talks some major exporters like Iran, Iraq, and Saudi Arabia are ramping up oil production throughout the year. Russia is no exception. Russian oil output surged to a historical record ahead of informal talks with fellow oil producers in late September. Russian oil drillers were pumping up 11.75 million barrels a day in September, the highest monthly average since the Soviet era. Russia’s Energy Ministry reported domestic oil output increased 2.4% to 363.7 million tons from January until August. At the same time, Russia’s President Putin said he is confident producers can overcome differences that derailed a proposal to freeze output rates in April. Besides, Russia would be ready to curb output at the level of any month in the second half of this year, Energy Minister Alexander Novak stated at G20 summit in China. According to Russian officials, imbalance of supply and demand in the global oil market is gradually shrinking. «In August-October last year, we saw an excess of supply for raw materials over consumption. This offer is now being actively consumed», Vice Energy Minister Kirill Molodtsov made a comment.
The OPEC meeting in Algiers ended with a preliminary agreement on a modest output cut. Some analysts say the risk of disappointment over the deal is high as details on its implementation will have to be discussed at the next cartel’s meeting in November.
