Novak said about the effectiveness of the agreement to reduce oil production

Alexander Novak

Photo: Oleg Yakovlev / RBC

Energy Minister Alexander Novak said that the countries-exporters of oil has already implemented a plan to reduce oil production. According to him, the initiative to stabilize the world oil market has proved its effectiveness, he expects a further reduction in oil reserves

According to the Minister of energy of Russia Alexander Novak, the country’s oil exporters, which have pledged to cut production and ran it on 100%. According to him, the initiative was effective. The Minister said that the process of reduction of oil reserves in the world began in March and will continue to accelerate. It is reported TASS with reference to the press service of the Ministry.

“We see high discipline among the participants, who together have already reached full compliance with previously identified parameters, namely, the voluntary reduction in production by about 1.8 million barrels per day to the level of October. 100% satisfaction, and a seasonal rising demand should strengthen the already good effect of the initiative over the next months,” he said.

Furthermore, Novak called for the renewal of the agreement on production cuts.

“Russia expresses its solidarity with the efforts of partners in rebalancing the market and believes that the joint initiative to stabilize the world oil market is currently effective. We discuss various options and believe that the extension for a longer period will help to expedite the return of markets to a more healthy state,” said the Minister.

The Minister noted that the trend in the decline of commodity stocks of oil will continue. “At the moment we are already seeing a decline in commodity stocks of oil and oil products in OECD: a process that began in March and will accelerate. Reinforces this trend is the sharp decline in stocks in floating storages, i.e. in tankers, where since the beginning of the year, they dropped by more than a third,” he said.

At the end of November 2016, OPEC agreed to reduce oil production in early 2017 by 1.2 million bbl./day, to 32.5 million barrels. 10 Dec 2016 11 countries outside OPEC, including Russia, Kazakhstan, Azerbaijan, Oman and Bahrain, had undertaken from January 2017 in total to reduce the volume of oil production at 558 thousand Barr./day. Moscow has pledged to cut daily production of hydrocarbons by 300 thousand Barr. in the first half of 2017.

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