Russia To Freeze Oil Output At January Level — Putin

© Christian Hartmann / Reuters

President Vladimir Putin has said Russia will freeze this year’s oil output at January’s production level. An agreement was reached during his meeting with the heads of the country’s oil majors on Tuesday.

RT report continues:

Putin said Energy Minister Aleksandr Novak is in constant talks with foreign oil exporters and has agreed with them that Russia will not increase oil exports.

"It’s been proposed that the volume of oil production in Russia in 2016 will be based on the figures of January this year, but, of course, on average throughout the entire 2016," said the president.

On Tuesday, Novak said that over 15 countries have confirmed their readiness to freeze current output levels.

The Russian Energy Minister added that African, Latin American and Persian Gulf producers are optimistic about joining the deal which could be effective even without Iran’s participation.

"Iran has a special situation as the country is at its lowest levels of production. So I think, it might be approached individually, with a separate solution," said Novak.

After oil prices hit 12-year lows of US$27 per barrel in January, the world’s two biggest oil producers – Russia and Saudi Arabia as well as OPEC members Qatar and Venezuela agreed on an oil production freeze at January levels. This was the first crude production accord since 2001.

Ecuador, Algeria, Nigeria, Oman, Kuwait, the United Arab Emirates have said they are ready to join the pact. Iran and Iraq say they only support steps to improve the situation in the oil market, avoiding promises to join the production freeze.

Novak earlier mentioned that producers of three-quarters of the world’s oil are ready to join the deal.

‘Critical Mass’ Reached To Freeze Oil Output — Russian Energy Minister

Russian President Vladimir Putin © Ramil Sitdikov / Sputnik

RT reports that a tentative deal to stay at the current crude output levels has been backed by countries producing three-quarters of the world’s oil, according to Russian Energy Minister Aleksandr Novak.

"To date, over 15 countries have already confirmed their readiness. Those publicly announced positions show that oil exporters accounting for 73 percent of the world’s oil, favored the freeze. That’s a critical mass of the countries which may agree."

According to the minister, African, Latin American and Persian Gulf producers have expressed optimism about joining the deal which could now be effective even without Iran’s participation.

"Iran has a special situation as the country is at its lowest levels of production. So I think, it might be approached individually, with a separate solution," said Novak.

Last month, the world’s top two crude producers Russia and Saudi Arabia put forward an initiative to fix output at January levels in order to stabilize falling oil prices. OPEC members Qatar, Venezuela, Kuwait and Iraq have expressed readiness to join the accord.

Nigerian Oil Minister Emmanuel Ibe Kachikwu told CNBC on Monday that the chances of a successful production freeze agreement were very high.

"There is a lot of conversation going on, and I think there is a lot of consensus building on the issue of the freeze," he said.

Ecuador’s President Rafael Correa said his country; Colombia and Mexico were considering joining at the crude producers’ next meeting.

Persian Gulf producers said they expect a majority of OPEC countries to freeze output, with the exception of Iran and Iraq.

Meanwhile, an Iranian official said on Tuesday that Tehran would consider an oil production cap only after the country’s output rises back to pre-sanctions level of 3.8 million barrels a day. Tehran plans to increase daily exports by one million barrels this year. Earlier, Iran’s Oil Minister Bijan Namdar Zanganeh called the output freeze proposal "ridiculous".
The Russian energy minister plans to discuss energy, oil and gas projects with his Iranian counterpart in March as well as meeting with other non-OPEC and OPEC countries to agree a deal to freeze oil production.