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Russia expects Saudi Arabia’s deliberate policy on oil production growth

June 03, 15:20 UTC+3
Saudi Arabia has opportunities to boost production, which have been done before and by now, the Russian energy minister says
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© AP Photo/Hasan Jamali, File

MOSCOW, June 3. /TASS/. Saudi Arabia is expected to pursue a deliberate policy in terms of oil production growth, Russian Energy Minister Alexander Novak said on Friday.

"Saudi Arabia has opportunities to boost [production - TASS]. This may have been done before and by now. I think the policy will be deliberate," he said.

Saudi Arabia is the only OPEC member-nation having sufficient flexibility for the market balancing. It accounts for 67% of free capacity of the OPEC (about 2% of the global oil production). At the same time, Saudi Arabia changed its balancing supplier strategy and managed to reach peak production levels in 2015.

Meeting with OPEC

Russia’s Energy Ministry plans to hold a meeting with the ministers of OPEC members states this year, Novak said. 

"We will continue to interact in the format of a dialogue between energy ministries. I think this year we will hold a relevant meeting," he said adding that the meeting will involve all the member-states of OPEC.

Speaking about the role of OPEC today, Novak said due to contradictions between and within the countries OPEC does not play the role it played before

"We see that OPEC does not take any drastic solutions but is more of a consultant, holds meetingsm assesses the situation and so on," he said.

Historically, the key mission of OPEC was to coordinate the oil policies of its member-states to maintain fair oil prices.

Recently, OPEC has been criticized for ignoring their duties on market regulation. Until recently, OPEC quotas were the only mechanism to regulate oil supply.

On June 2, Oil and Energy Ministers of oil producing countries met in Vienna. The next OPEC summit will be held in that city on November 30, 2016.

On April 17, the capital of Qatar Doha hosted the meeting of representatives of oil producing countries. It was attended by delegations of 18 countries. The 19th participant - Iran - refused to discuss the "freeze" of oil production. Teheran referred to the fact that recently removed sanctions that were imposed on the country’ oil exports were removed.

The participants of the meeting in Doha failed to agree on the "freeze" of oil production. After 12 hours of talks the parties came to conclusion that they need more time for consideration.

Quotas for oil production

OPEC refusing to set new quotas for oil production will have no impact on its price, Deputy Prime Minister Arkady Dvorkovich told journalists on Friday.

"No, I think because nobody seriously expected these agreements, the situation will not have an impact. When you have expectations that do not come true then there are problems, and vice versa. This surprises the market and creates all sorts of fluctuations," he said, answering TASS question about the impact of the recent OPEC meeting on the oil price.

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