LONDON — The head of Russian state-run oil company Rosneft on Wednesday floated the idea of a coordinated output cut by major oil-producing countries to prop up sagging prices but fell short of saying whether Moscow would contribute to such a plan.
Rosneft Chief Executive Igor Sechin, a close ally of President Vladimir Putin, told the IP Week conference in London suggested major oil producers cut production by 1 million barrels per day (bpd) to reduce oversupply, which he estimated at 1.5 million bpd.
"A coordinated supply cut by major exporters by around 1 million barrels per day would sharply reduce uncertainty and would move the market towards reasonable pricing levels," he said.
Oil prices have slumped more than 70 percent to near $30 a barrel over the past 18 months as supply exceeded demand after OPEC, seeking to drive higher-cost producers out of the market, decided not to cut production.
Sechin has in the past criticized OPEC's strategy saying the group, of which Russia is not a member, had "lost its teeth". He has also said Moscow would never cooperate with OPEC as Russia's oil industry could withstand any price rout thanks to cheap labour and a weak local currency.
On Wednesday, Sechin gave similar messages but chose his words more carefully, rarely mentioning OPEC and blaming only "some producers" for creating the glut.
Oil markets have risen in recent weeks on hopes of a deal between OPEC and non-OPEC producers after a number of Russian officials suggested dialogue should begin.
But Putin has not spoken yet on the subject. Wednesday's speech by Sechin was also his first statement on the subject in recent weeks.
Sechin declined to say whether Russia would participate in any coordinated cut, when quizzed by reporters after the speech.
"Who are we supposed to be talking to about cuts? Will Saudi Arabia or Iran cut production?" Sechin asked.
Struggling oil-producing countries have urged OPEC leader Saudi Arabia in recent weeks to call a special meeting to discuss output cuts. — Reuters
