OPEC will continue to insist on Russia cutting, not just freezing oil production after the organization finalizes its own agreement, the Saudi Energy Minister Khalid al-Falih said before the OPEC meeting.
"A freeze in production at November 2016 levels that Russia proposed, arguing that it would constitute output cuts against plans for 2017, does not correspond to what OPEC is trying to achieve in Vienna," Sputnik cited him as saying.
The Russian Energy Ministry said that they are waiting for a final OPEC decision on cutting production.
Iranian Oil Minister Bijan Namdar Zanganeh said that Russia is ready to reduce output. "Moscow have agreed to reduce their production and cut after our decision," Reuters cited him as saying.
Iraq's new oil minister Jabar Ali al-Luaibi said earlier that Iraq is ready to cut oil production within the country's interests.
A leading analyst of the National Energy Security Fund, a lecturer at the Financial University under the Government of the Russian Federation, Igor Yushkov, speaking to Vestnik Kavkaza, noted that, in fact, the freeze of oil production in Russia will be a cut. "When about two months ago, there was a first requirement to reduce the production in Russia, we made a return maneuver: we will reduce the volume of production only by limiting the increase in oil production at certain quantities, which we planned to increase at first. We planned to increase our oil output by another 300-400 tonnes per day," he said.
Meanwhile, it is unclear whether at least OPEC countries will be able to agree on cutting oil production. "Saudi Arabia will again start to accuse Russia in reaching a historical maximum - although it also set an oil record a month ago," the expert warned.
According to him, if the agreement between OPEC and Russia is concluded, the negotiations with the Russian oil producers will be held by President Vladimir Putin personally. "Because there is no formal levers of pressure on oil companies in Russia. Our legislation does not allow to say that today it is allowed to produce more or less, because we have a market model of the industry," Igor Yushkov expects.
There will be benefits for Russia from cutting oil production only when the price of oil will rise to the level at which the budget of the country will cease to be scarce. "Of course, Russia would like to see high oil prices, at the same time, we should not forget that they depend not only on OPEC and Russia, but also from the US Federal Reserve," the economist pointed out.
"Therefore, I think that if OPEC reaches agreements, and Russia joins them, it is possible that prices will increase to $60 per barrel or even higher. But if the Federal Reserve raises rates in December, the oil price will drop to $40 per barrel again," the leading analyst of the National Energy Security Fund, a lecturer at the Financial University under the Government of the Russian Federation concluded.