MOSCOW, November 26. /TASS/. Imbalances between larger oil supply and smaller oil demand will be settled by the market, Russian Energy Minister Alexander Novak said on Wednesday.

Low oil prices will automatically lead to a contraction in oil production at costly and inefficient projects which will reduce supply on the market, the minister said.

OPEC not to cut oil production quotas

The Russian Energy Ministry is skeptical that OPEC (Organization of the Petroleum Exporting Countries) will decide to cut oil production quotas, Novak stressed. No additional decisions should be made to cut oil production in the current market conditions, the minister said.

OPEC has agreed that an imbalance between demand and supply on the market will be resolved by market forces, Novak told reporters.

He explained that falling oil prices will automatically slash production on inefficient and expensive projects, putting supply under pressure. Novak believes that the imbalance between demand and supply is one of the most important reasons for the low oil prices. “The industry develops cyclically, and today we are in a cycle of a price fall. We will cut production volumes, inefficient projects will disappear, setting the price at fair level,” Novak said.

Arctic projects not affected by oil prices

The implementation of Arctic oil and gas projects in Russia will not be postponed amid the current low crude oil prices, Novak told journalists on Wednesday.

The minister explained that currently the Arctic projects are on the stage of geological exploration. “As you know, geological prospecting work in many projects is carried out just several months a year. I do not think that geological exploration will be suspended,” Novak said.