Nov 21, 2014 7:58 AM

Russian FM rejects cuts to oil production

The Associated Press

MOSCOW (AP) Russia's foreign minister said Friday that there should be no move to cut global energy production, even as the country's economy takes a hit from falling oil prices.

Russia is weighing how to respond to this year's 30 percent drop in the price of crude, to below $80 per barrel. Another government official said a decision on production targets had not yet been made.

But after a meeting with his Saudi counterpart in Moscow, Foreign Minister Sergei Lavrov said both Russia and Saudi Arabia did not want oil production targets to be affected by "political or geopolitical designs."

"Both we and Saudi Arabia believe that the price should be a market price, and the decisive role should be played by demand," said Lavrov.

Russia's energy minister, Alexander Novak, noted that while a production cut was still possible, that might be difficult.

"Our budget is very dependent on oil revenues. And we don't have the technology, like Saudi Arabia, to quickly reduce or increase our production," Alexander Novak told Russian news agencies. "But this question is under discussion, we are working within the government to understand whether such methods are feasible."

Lavrov's comments echoed theories, frequently spread on Russian state television, that the United States has manipulated global oil production to bring down prices worldwide and target unfriendly regimes. Russia's economy and currency, which has depreciated against the dollar by a third this year, have been hard hit.

Lavrov's meeting with the Saudi official came ahead of an OPEC conference scheduled for next week, when members of the 12-nation oil producing organization will discuss global production levels.


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