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Deputy PM: Russia will not purposefully cut oil production

January 29, 2016, 12:47 UTC+3

If the period of low oil prices lasts longer, the Russian oil market is capable of adjusting production and investments level on its own

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© Vladimir Smirnov/TASS

MOSCOW, January 29. /TASS/. Russia will not purposefully slash oil production; decisions are made by private companies, Deputy Prime Minister Arkady Dvorkovich said on Friday.

"We assume our oil sector is private and commercially focused. It is not under control of the state. We have a certain participation interest but the market on the whole is regulated by decisions of individual companies. So it will continue," the official said.

If the period of low oil prices lasts longer, the Russian oil market is capable of adjusting production and investments level on its own, Dvorkovich said.

"Correction of investments is inevitable under the excessively low level [of oil prices — TASS] and the too lengthy time period, and this will result in definite decline of production. This will not be a focused action of the government. The market is essentially self-regulating and self-adjusting and this will lead to stabilization of prices at higher level than now," Dvorkovich said. Companies will consider the situation on the basis of interests of stable functioning, he added.

Average annual oil price of $20-24 a barrel not realistic

According to Arkady Dvorkovich, the average annual oil price of $20-24 a barrel is not realistic and it may be higher than the current level in 2016.

"The price of $20-24 [a barrel] seems unrealistic as an annual average. I personally believe current prices may rise to a higher level exactly this year, particularly because of the global production decline," the official said.

Too many factors influence the market and the oil price is actually unpredictable, Dvorkovich said. Nevertheless, consultations with the market players are held on a going basis, making possible to understand potential market movements, he added.

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