| Last updated at: (Beijing Time) Friday, November 16, 2001 |
Russia Not to Cut Oil Exports: Official |
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Russia does not plan to cut its oil exports despite possible price war threat in the world oil market, a Russian government spokesman said Thursday.
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Russia does not plan to cut its oil exports despite possible price war threat in the world oil market, a Russian government spokesman said Thursday.
Russia, which directly depends on high oil prices for its budget implementation, has no plan to significantly cut oil exports despite Thursday's slump in oil prices or the threat of a price war in the near future, said the official.
The Russian government has announced that it has worked out scenarios for the development of the country's macroeconomic situation to the end of 2001 and for 2002, based on different oil prices.
Oil prices plunged to an almost critical level for the 2002 Russian budget after OPEC announced it would not cut production quotas if it did not receive the support of oil exporters outside the cartel, especially Russia, Mexico and Norway.
Most experts are making negative forecasts on oil prices. Moreover, oil market traders are predicting a price war between OPEC and independent producers and say prices could soon drop to fewer than 15 dollars per barrel.
In response, Russian oil shares plunged over seven percent by midday Thursday.
Russia recently decided to cut oil production by 30,000 barrels a day in the fourth quarter of 2001 and at the beginning of 2002, which is just 0.4 percent of its exports. But OPEC expects Russia, which is the second largest oil exporter after Saudi Arabia, to cut exports by 6.5 percent.
Russian Prime Minister Mikhail Kasyanov said Thursday that a greater cut in oil export would breach Russia's policy on oil prices hangs: an oil price floating corridor between 20-25 dollars per barrel. He said such a price can ensure investment in and development of the industry and it is also acceptable to the consumers.
The issue should not be aimed at increasing or decreasing oil prices, but at stabilizing them at a level that is fair for Russia, he said.
Russian Deputy Prime Minister and Finance Minister Alexei Kudrin said he hoped Russia and OPEC would be able to work out a mutually acceptable resolution to the problem.
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