London — Speculation over a joint effort by OPEC and Russia to support oil prices by cutting output reached fever pitch this week after Moscow said it was ready to discuss a coordinated approach with the producer group.
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The issue is likely to be discussed at a joint meeting next month, energy minister Alexander Novak has said. There has been no confirmation, however, from OPEC kingpin Saudi Arabia.
It is not the first time that Russia and OPEC have sought to join forces to support prices by curbing production or exports. But Russia's past collaboration with OPEC has been fraught with tensions over market share.
Pressured by OPEC to help support oil prices, Moscow has enacted some cuts but the reductions have been limited and brief.
The following are some highlights of the cooperation over oil supplies between OPEC and Russia:
--March 1998: OPEC agrees to cut output by 2.6 million b/d to support prices after crude drops to $12/b from more than $22/b in January 1997. As part of an OPEC/non-OPEC output cut agreement, Russia agreed to reduce exports by 61,000 b/d, but this was largely symbolic given its export level of around 2.4 million b/d.
Eventually, Russia's crude production fell by 70,000 b/d, or 1% year on year, to 6.1 million b/d in 1998. At the same time, its exports rose by around 100,000 b/d, or 3.5% on year, to 2.4 million b/d.
--March 1999: As prices plummet to $10/b, OPEC agreed a new output cut of 2 million b/d, with non-OPEC Russia, Oman and Mexico also agreeing to contribute 300,000 b/d of the total. Russia agrees to cut oil production by 100,000 b/d. Despite the agreement, Russia's output rose by 50,000 b/d to 6.13 million b/d in 1999. Its crude exports to international markets, however, fell by 70,000 b/d to 2.33 million b/d in 1999 as Russia redirected some volumes to the FSU markets.
--September 2001: Terrorist attacks on America send global stock markets reeling and depress oil prices amid fears of a further global slowdown.
--November 2001: After pressure from Saudi Arabia, Russia offers to cut production by just 30,000 b/d. It later raises the offer to 50,000 b/d.
--December 2001: Following continued pressure by OPEC to help support prices, Russia agrees to cut exports by 150,000 b/d during Q1 2002. Despite the deal, Russian production was little changed over the quarter at 7.36 million b/d, according to US EIA figures.
--December 2008: When oil prices dropped to below $40/b in December 2008 from record highs of $147/b in July that year, Russia's contacts with OPEC intensified again. High-level Russian officials met with top OPEC officials to discuss the situation in the market.
In the second half of the year, OPEC agreed on the biggest-ever production cut of 4.2 million b/d, in a series of agreements, but was also seeking additional support from non-OPEC producers. Moscow said it could reduce output by around 300,000 b/d, although Moscow took no commitments.
--November 2014: As prices started to fall again from more than $115/b in mid-June to below $70/b in November, contacts between Russia and OPEC resumed. Russia took part in a number of meetings with OPEC and non-OPEC countries, but they did not result in any sort of agreement, with the participants repeatedly denying special actions to balance the market were considered.
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