Venezuela’s Oil Minister to Meet With Russian Energy Minister Monday

“Indeed, these parameters were proposed, to cut production by each country by up to 5 percent”, Novak said when asked if Saudi Arabia had made a proposal to cut output.

Currently, Russia produces about 10.1 million barrels of oil per day.

“Indeed, these parameters were proposed, to cut production by each country by up to 5 percent”, Novak said.

Saudi Arabia has yet to comment on the proposal but a senior Persian Gulf OPEC official told Reuters that “Gulf OPEC countries and Saudi Arabia are willing to cooperate for any action to stabilize the worldwide oil market”.

“Aside from the geopolitical tensions, Russian Federation has a large number of competing oil producers (with the biggest, Rosneft, accounting for less than 40% of supply)”. Given that the USA has begun exporting oil exports and the increase in supplies from Iran after the lifting of sanctions, this struggle can only intensify. The meeting would discuss the problem of low commodity prices and the coordination of possible production cuts, according to Russian Energy Minister Aleksandr Novak.

Another source told Reuters that the initiative to cut production came from Venezuela and Algeria, rather than the Saudi kingdom.

Iranian Oil Minister Bijan Zanganeh, attending a Franco-Iranian summit in Paris on Thursday, said Iran had not been contacted by Russian Federation about any cuts in output. OPEC abandoned its output target on December 4 at a meeting, and Saudi Arabia has long resisted calls from other OPEC members to scale back output, which reached record levels past year.

But analysts cautioned against putting too much hope on such talks, noting that similar discussions in the past had failed to end with concrete results. Market prices for crude benchmarks dropped to a 12-year low in mid-January, sliding below the historic level of $30 a barrel before starting to recover after January 20.

Prices have crashed by about three quarters since mid-2014 owing to weak demand, overproduction, the supply glut and a global economic slowdown, particularly in key user China.

“Potentially, this will happen with Russia’s cooperation limited to half the percentage reduction that OPEC members need to make for the adjustment”, analysts said.

While Saudi Arabia and Opec has repeatedly been calling on non-members to contribute to output cuts, Russian Federation has been shying away from production cuts citing technical issues.