Russia warns of 'fragile' oil market due to geopolitics, but says it can raise output
* Russia's Novak warns of supply risks globally
* Russia could raise output by 300,000 bpd - Novak
* Russia wants to raise its stake in LNG markets
(Adds comments on oil prices, production output)
By Vladimir Soldatkin
VLADIVOSTOK, Sept 12 (Reuters) - Global oil markets remain
"fragile" due to geopolitics and production declines in several
regions, Russia's energy minister said on Wednesday, but added
his country could raise output if needed.
The comments come amid oil prices eyeing $80 per barrel
, up from little over $60 in February, amid supply
disruptions and expected U.S. sanctions against Iran.
"Today, the situation is quite fragile, of course, and it is
related to the fact that not all the countries have managed to
restore their market and production," Russian Energy Minister
Alexander Novak said at an economic conference in the Russian
far eastern city of Vladivostok.
"We observe such situation in Mexico, where the decline more
than halved from the forecasts on 2018. In Venezuela production
is falling quite strongly, by 50,000 barrels per day. This means
that the market is still not balanced in long-term perspective."
Venezuelan oil exports have halved over the past year to
little more than 1 million barrels per day (bpd) as the South
American country grapples with a political and economic crisis.
Novak also warned of the impact on markets of looming U.S.
sanctions against Iran's oil exports, which will be implemented
"This is huge uncertainty on the market – how the countries,
which buy almost 2 million barrels per day of Iranian oil will
act. Those are Europe, Asia Pacific region ... There is a lot of
uncertainty. The situation should be closely watched, the right
decisions should be taken."
Washington has put pressure on other countries to also stop
importing Iranian oil. Despite some opposition from governments
in Europe and Asia, many oil firms have already started dialling
back purchases in anticipation of U.S. sanctions.
Should markets overheat and prices spike, Novak said there
was potential for some countries to raise output.
"Russia has potential to raise production by 300,000 barrels
(per day) mid-term, in addition to the level of October 2016."
October 2016 was a baseline for the accord to withhold
output from 2017.
For that month, Russia produced 11.247 million barrels per
day, a post-Soviet record high.
Novak said a September meeting between the Middle
East-dominated Organization of the Petroleum Exporting Countries
(OPEC) and a group of other non-OPEC producers, including
Russia, will discuss the market situation in Algeria.
He said the meeting would discuss further oil market
cooperation, taking into account supply and demand forecasts for
the third and fourth quarters of 2018 and the first half of
Novak also said that Russia plans to obtain a 20 percent
share of the global liquefied natural gas (LNG) market thanks to
abundant gas reserves.
"I am sure we will reach this goal," he said.
(Reporting by Vladimir Soldatkin in VLADIVOSTOK; additional
reporting by Henning Gloystein in SINGAPORE; Editing by Paul
Tait and Michael Perry)
First Published: 2018-09-12 02:09:54
Updated 2018-09-12 04:38:00
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