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OPEC might revise decision to keep current oil production quotas by spring 2015 — expert

November 27, 2014, 21:28 UTC+3 MOSCOW

This decision would adversely impact Russia’s economy and would exert extra pressure on the ruble exchange rate, former Russian Minister of Economic Development told TASS

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© AP Photo/Hasan Jamali

MOSCOW, November 27. /TASS/. It is not ruled out that OPEC might revise its decision to keep the current oil production quotas by the spring of 2015, Andrey Klepach, a deputy chairman of the board of Vnesheconombank and former Russian Minister of Economic Development, told TASS on Thursday.

“I think OPEC will finally revise this decision, but it will most probably take place by the spring,” he said, adding that this decision would adversely impact Russia’s economy and would exert extra pressure on the ruble exchange rate. “This decision will have a negative impact on the Russian economy, prices will go further down, the ruble will feel pressure,” he said. “Falling oil prices is a negative factor from the point of view of the economy and not the only one.”

Earlier on Thursday, Russian Finance Ministry’s long-term strategic planning department director Maxim Oreshkin said OPEC’s decision meant that the problem of excessive supply on the global oil market would not have a quick solution. “We have been witnessing in the recent days that OPEC’s uncertainty in issues of limiting production has led to more negative pressure on oil quotations,” he said, adding that in such conditions “even a scenarios of oil prices at $80 per barrel looks moderately optimistic for Russian in the next few years.”

“This situation is another evidence in favour of our position that Russia’s budget policy must be adjusted against the new oil prices that might stay (at a relatively low level) for a long time. The medium-term adjustment means a harsher approach to state expenditures and their possible optimization,” he said.

On Thursday, the Organization of the Petroleum Exporting Countries (OPEC) decided to keep oil production quotas unchanged at the current level of 30 million barrels a day. OPEC Secretary General Abdalla Salem El-Badri said however, the organization might return to output quota revision in six months.

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