Russia Aims to Speed Up Oil Output Cuts

(Bloomberg) -- Russia is aiming to accelerate the pace of oil production cuts after its reductions drew criticism from Saudi Arabia.

“Of course, we will try to make the cuts faster,” Energy Minister Alexander Novak told reporters in Belgrade, Serbia. “We have our limitations of a technological nature, yet we will aim to reach the levels we agreed on.”

Novak’s comments come just days after Saudi Energy Minister Khalid Al-Falih said Russia’s production curbs have “started slower than I like.” The country’s output level, along with that of Saudi Arabia, is crucial in ensuring the success of the Organization of Petroleum Exporting Countries and its allies’ plan of taking oil out of the market to ensure higher prices.

Russia has pledged to gradually cut its output by 228,000 barrels a day within the first quarter and maintain the cap in the second. The nation’s average production in the first half of the year could be about 130,000 barrels a day lower than its October level, the baseline it agreed to, according to calculations based on OPEC’s report Thursday.

Russia Aims to Speed Up Oil Output Cuts

The slower pace of Russia’s production cuts is a result of the winter freeze in Siberia, the nation’s key oil province, Novak said, reiterating earlier comments. “We have special conditions,” he said. “We cannot ensure sharp declines in principle.”

OPEC itself lowered production by more than 750,000 barrels a day in December, even before the official agreement went into effect this month. Saudi Arabia accounted for just over half of that reduction.

Novak plans to meet Al-Falih during the World Economic Forum in Davos, Switzerland, next week to discuss the OPEC+ deal, he said.

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