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Lukoil CEO warns against sharp growth in oil prices up to $150

January 24, 21:17 UTC+3 DAVOS

Lukoil’s budget for the next three years is based on the oil price of $50 per barrel

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© David McNew/Getty Images

DAVOS, January 24. /TASS/. Vagit Alekperov, CEO of Russian oil major Lukoil, believes the OPEC+ oil production cut agreement will contribute to stabilization of oil prices but it is important to prevent their "explosive" growth up to $150 per barrel.

Speaking to reporters on the sidelines of the World Economic Forum in Davos, he said:

"It seems that the governments of the oil producing countries are not happy with $70 and the race for a "mechanical bunny" starts again. We must bring them [the prices] back to normal, to the level of 2011-2012, and then smoothly withdraw from the agreement,"Alekperov said.

"We should not allow an explosive jump in oil price, when it was $140-150 again," he stressed.

He recalled that after a sharp drop in oil prices, the countries were happy with the rise up to $50 per barrel.

According to Alekperov, Lukoil’s budget for the next three years is based on the oil price of $50 per barrel.

OPEC member-states and non-OPEC oil producing countries reached an agreement on reduction of oil production (the OPEC+ agreement) in late 2016. The agreement obliges the parties to cut production by a total of 1.8 million barrels per day in comparison with the level of October 2016. Under the agreement, Saudi Arabia and Russia have the biggest cutbacks, which are 486,000 barrels per day and 300,000 barrels per day, respectively.

The deal was initially valid in the first half of 2017 but since then it has been extended twice: first - until the end of March 2018, and later - until the end of 2018. The goal is to remove surplus world oil reserves from the market.

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