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Russia wants oil output cut more than OPEC does?

Oil&Gas Materials 25 October 2016 17:33 (UTC +04:00)

Baku, Azerbaijan, Oct.25

By Leman Zeynalova – Trend:

Russia would surely support the oil production cut - even deeper than what OPEC wants, Gal Luft, co-director of the Institute for the Analysis of Global Security (IAGS), a Washington based think tank focused on energy security, and a senior adviser to the United States Energy Security Council, told Trend Oct.25.

Earlier, Russia’s Energy Minister Alexander Novak said that his country will produce 548 million tons (11 million barrels per day) of oil in 2017, a post-Soviet record, however Moscow still wants global producers to curb production amid weak prices.

“Russia's desire to reach a record level in oil production is aspirational, but right now its main concern is price and its national income, since its economy is crashing under low oil prices,” said Luft.

Regarding Iraq’s desire to be exempted from the production cut, Luft noted that there is clearly a good reason for their exemption from the quota and the same is true for Libya, as those two countries can offset the impact of the production cut.

“The question is whether or not they will be able to ramp up production. Libya currently aims to increase production by 400,000 barrels by the end of the year, but the goal is lofty and may not be supported by events on the ground. The same is true for Iraq,” he added.

Previously, Iraq's Oil Minister Jabar Ali al-Luaibi said his country should be exempted from output restrictions as it was fighting a war with “Islamic State” (IS, aka ISIS, ISIL or Daesh) terrorist group.

In September, OPEC producers agreed during the informal meeting in Algiers to cut down the oil output to 32.5 million barrels per day (bpd) from current production of 33.24 million bpd.

How much each country will produce is to be decided at the next formal meeting of OPEC in November.

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