The objective of Russian-Venezuelan consultations is to consider measures that might support stability of oil prices and prevent their further slide. On the Russian side, the talks will be attended by Energy Minister Alexander Novak and President of the oil corporation Rosneft, Igor Sechin.
Russian negotiators will meet with Venezuelan Foreign Minister Rafael Ramirez in Vienna at a meeting that will be held behind closed doors, although it was initially planned as a conference, sources at the Russian delegation told TASS.
The prices of crude oil, which makes up a considerable share of Russian exports, fell 27% since the beginning of the year on the background of shrinking demand and the emergence of new production centers like the US, which has impressive reserves of shale oil.
The fall of prices has caused widespread concern among the exporting countries, the governments of which have included certain price anticipations in their national budgets. It has also weakened the national currencies to some extent and has depressed the exchange rates of national currencies.
The previous time that OPEC slashed production quotas was in 2008, when the prices fell from $140 to $ 32 per barrel.
At present, Russia’s Urals blend of oil is selling at $80 per barrel. Alexander Novak told Rossiya’24 news channel the possibility of an OPEC decision to cut down the output was small enough.
Representatives of the oil cartel have been holding active consultations over the past several weeks and experts believe that complexities in devising a common approach and a unified position arise from the member-nations’ struggle for customers.
Some countries of the cartel, like Iran, Iraq, Nigeria, Venezuela and Ecuador speak in favor of an earlier possible reduction of the quotas while the United Arab Emirates and Kuwait oppose the step.
On the face of it, the position taken by Saudi Arabia is not clear.Russia, the largest suppliers of crude to the international market is staying away from the OPEC activities, even though to member-states of the organization account for 30% of the entire global output.
Abstention from OPEC procedures is linked to the technological complexity of regulating production in the regions with highly mixed weather conditions where the bulk of Russian oilfields are located.
Moscow-based Kommersant Daily said November 24 quoting its own reliable sources that Russia was ready to propose OPEC to cut production by 15 million tons annually. There has been no official confirmation of the report so far.
Russian officials said earlier Moscow was drafting measures to support the oil quotas.