Russia May Cut Oil Production, Kuwait’s Minister Says

Russia may cut oil production by as much as 400,000 barrels a day, equivalent to 20 percent of an estimated reduction in OPEC output, as demand shrinks because of the global recession, Kuwait’s Oil Minister said.

Russian Deputy Prime Minister Igor Sechin, who is attending OPEC’s meeting in Algeria today, is “promising to act positively,” Mohammed al-Olaim said in an interview with Bloomberg Television. “We think they will seriously do so.”
Oil ministers from Saudi Arabia, Iran and Venezuela said the Organization of Petroleum Exporting Countries is considering a cutback of 2 million barrels a day at the meeting in Oran. OPEC is asking Russia and other countries outside the group to curb production by 600,000 barrels a day.

A production cut of 400,000 barrels a day is being talked about by the Russians and they “do think they will have to participate in a cut,” al-Olaim added.

The total reduction, including those from non-OPEC producers, could be as large as 2.6 million barrels a day, or 3 percent of world oil demand. Crude oil has fallen 70 percent from a record $147.27 a barrel reached on July 11 as a recession trims consumer demand for fuels.

Russia produced 10 million barrels of oil a day last month, while Saudi Arabia pumped 8.8 million barrels a day of crude as well as more than 1 million barrels a day of lighter oil, according to International Energy Agency estimates.

Bloomberg