Russia, Saudi Arabia unlikely to cut oil output in favor of Iran

Oil&Gas Materials 3 February 2016 14:20 (UTC +04:00)

Baku, Azerbaijan, Feb. 3

By Umid Niayesh - Trend:

Nor Russia, neither Saudi Arabia will agree oil production cuts, especially when Iran is coming back online and wants to increase oil market share, Sam Barden, the director of Wimpole International, an energy market development company, told Trend.

He made the comments while responding a question about outcome of a possible gathering of OPEC and non-OPEC countries, including Russia.

"Given that OPEC as an organization is unable to agree within itself on oil production quotas and cuts, I think it is highly unlikely that Russia will be able in any way to achieve a coordinated production cut with OPEC members," Barden told Trend Feb. 3.

Oil production cuts by Saudi Arabia and Russia in this instance would just be passed on to Iran, the expert said, referring to that as an unlikely scenario.

The cartel's delegates said last week that a gathering of oil officials of OPEC and non-OPEC countries could take place in February or March, perhaps at an expert level, rather than ministerial one.

Meanwhile, Russian Foreign Minister Sergei Lavrov said Feb. 2 that his country will join the OPEC meeting with non-member states if it takes place.

"I would be surprised if such talks actually take place. Russia and OPEC have had the opportunity over the years to coordinate production, or Russia to even join OPEC , and the reality is they have not done this," said Barden.

Saudi Arabia and Russia are fighting for market share and to be the world number one producer, the expert added. Barden said that as far as Iran goes, it will obviously be watching closely, but won't be concerned.

Iran is a member of OPEC, and so would no doubt welcome talks, especially as they have good relations with Russia currently, he said.

"However, Iran wants to increase its market share, so I cannot see Iran agreeing with OPEC, or individually with Saudi Arabia or Russia, to reduce oil production," Barden added.