Russia and Saudi to cooperate on oil

Foreign minister said Russia will cooperate but will not commit to limit oil output

Russian prime minister Medvedev at a signing of an oil deal.
Russian prime minister Medvedev at a signing of an oil deal.

Foreign minister Sergei Lavrov said during talks in Moscow that Russia is willing to cooperate with Saudi Arabia on the oil market, Bloomberg has reported.

At a historical meeting with Saudi Arabia’s foreign minister Prince Saud Al-Faisal, Lavrov said Russia is willing to colaborate with Saudi Arabia but will avoid a commitment to limit output to reverse plunging prices.

Saudi Arabia and Russia, which together produce 25% of global oil, agreed the market “must be free of attempts to influence it for political and geopolitical reasons,” Russia’s foreign minister told the media after the talks.

Where supply and demand are “artificially distorted,” oil exporters “have a right to take measures to correct these non-objective factors,” he added.

Lavrov and the Saudi foreign minister said in a joint statement that they’ll coordinate on “issues” affecting the energy and oil markets.

Last month, a spokesman of state-controlled OAO Rosneft, said that Saudi Arabia was engaged in political manipulation of oil by offering price discounts.

However, the two sides have different views on the price of oil. Russia needs its benchmark Urals export blend to trade at $100 to balance the budget this year and $90 next year, according to Finance Minister Anton Siluanov.

Russia’s oil industry has been hard hit by sanctions as Europe and the US have barred oil-technology exports, blocked access to financial markets, and threatened to delay projects.

The oil price hit a new four-year low last week falling below $80 per barrel.
The Organisation of Petroleum Exporting Countries (OPEC) will meet on 27th of November in Vienna to discuss output for future months.

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