The failure of oil producing countries to strike a deal on capping crude production may keep oil prices low through 2017 and beyond, Russian Energy Minister Aleksandr Novak said on Thursday.
“If the countries don’t agree [on decreasing production – Ed.] competition and production increases will continue, and prices may stay low in 2016, 2017, and so on,” Novak told journalists.
Russia won’t increase oil production this year, it will equal the 2015 level [almost 11 million barrels a day - Ed.], according to the minister.
Novak considers the initiative to stabilize oil output at January 2016 level as reasonable. The plan to freeze oil production levels was put forward earlier this month by Russia and Saudi Arabia.
However, Riyadh says it will not reduce crude production at its own expense and that high-cost American oil producers should make the cuts.
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OPEC members Qatar, Venezuela, Kuwait and Iraq have also expressed a readiness to join the accord.
Another OPEC member, Iran is the main sticking point; it has declared its support for the oil output freeze but hasn’t made any pledges to curb production.
Novak announced plans to discuss energy, oil and gas projects with his Iranian counterpart in March.
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However, the Iranian Oil Minister Bijan Namdar Zanganeh has called the output freeze proposal "ridiculous". Iran has just restarted oil exports after sanctions over its controversial nuclear program had been lifted.
Talks on curbing output are still under way and are expected to be concluded by March 1. Novak expressed confidence that a deal will be reached.