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Lukoil can work comfortably in Russia at an oil price of $ 9-11 per barrel — Alekperov

On April 21, price of Russian Urals oil in northwestern Europe fell to $11.59

MOSCOW, April 25. /TASS/. Lukoil can work comfortably in Russia at an oil price of $9-11 per barrel, the company’s CEO Vagit Alekperov said in an interview with Rossiya 1 channel.

"We can work quite comfortably in Russia and at both prices of $9 and $11. That is, the tax regime that exists today in our country protects investors, especially in hydrocarbons, from low prices. We will be competitive at the lowest prices," he said.

At the same time, Alekperov noted that due to the damping mechanism, oil prices in Russia do not affect the price of oil products.

On April 21, price of Russian Urals oil in northwestern Europe fell to $11.59. This became the minimum figure since March 1999, when the price dropped to $11.74, according to Argus agency.

Russian oil declined amid a shock, when the price of May WTI futures on April 20, before these contracts expired, became negative. According to Argus, this was due to the lack of oil storage tanks in Oklahoma, the center of price determination in the WTI market.

Global oil market

The oil market will be balanced during 2020 - the first half of 2021 due to the agreement on joint reduction of production, Alekperov said.

"The efforts that our country is making together with the Saudis, and the fact that the United States has joined in solving this problem, of course, will lead to the market being regulated. It will be balanced during 2020 - the first half of 2021," he said.

Moreover, removal of restrictive quarantine measures will play an important role. "Today's price is not even important for us, not the price of the future, but the beginning of the consumption of our products. Removal of restrictions both in our country and in the European and American markets," Alekperov explained.

OPEC+ countries at an emergency video conference on April 12 were able to conclude an agreement to reduce oil production. It includes cumulative decline in oil production in May - June by 9.7 mln barrels per day, in July - December - by 7.7 mln barrels per day, in January 2021 - April 2022 - by 5.8 mln barrels per day. In December 2021, the terms of the deal may be revised.