x Abu Dhabi, UAEWednesday 26 July 2017

Oil producers cut production

Russia and Azerbaijan, two significant non-Opec oil producers, said on Wednesday they intend to cut production.

Ali al Naimi, the Saudi minister, told reporters that the cut was needed
Ali al Naimi, the Saudi minister, told reporters that the cut was needed "to bring things in balance".

ORAN, Algeria // Russia and Azerbaijan, two significant non-Opec oil producers, said on Wednesday they intend to cut production by more than 600,000 barrels per day in solidarity with a widely expected reduction in Opec production. Opec ministers gathered for the meeting have indicated they support cutting output by up to 2 million barrels per day to reverse a relentless slide in crude prices. But Wednesday's announcements by Russia and Azerbaijan are the first concrete evidence that other producers will follow suit.

Russia, the world's second-largest oil producer, has already cut production by 350,000 barrels per day, the country's deputy premier, Igor Sechin, told the conference. "The Russian Federation has limited price incentives for crude oil exports by 1.5 million tonnes", equivalent to roughly 350,000 barrels per day in the period since limits were imposed in November, he said.

"If the current prices continue on the global markets, the Russian administration will act to reduce the supply by 16 million tonnes per year, or 320,000 barrels per day," Mr Sechin added, in a speech read by a translator. Natig Aliyev, the Azeri oil minister, told the conference that his country was willing to cut up to 300,000 bpd. After the opening speeches, Opec ministers retreated into a closed session to debate their next move.

An announcement of a production cut is expected from the group after the oil minister of Saudi Arabia, the group's most influential member, said yesterday he would seek a cut of 2 million bpd, echoing similar comments by other ministers. Ali al Naimi, the Saudi minister, told reporters that the cut was needed "to bring things in balance". cstanton@thenational.ae