Dmitry Litvinovich: Russia makes concession to OPEC

Russia’s decision to reduce oil export is an important psychological factor for the market, but its effect may be of a short-term nature, analysts of large investment companies think. What is more important in the situation, is that Russia agreed to make concession to OPEC at all, not the reduction amount. It demonstrated readiness for co-operation with the oil cartel for oil price regulation.

Russia wants to keep friendly relations with the Arab nations that are members of the cartel, that is why it has to compromise. On the other hand, Russia is concerned about relations with the USA. But Russia may lose in its attempts to attain these two objectives.

OPEC President, Algeria’s Minister for Energy and Mining industry Chakib Khelil is still unaware of a decision to be made at an extraordinary session of OPEC ministers on reduction of oil export quotas scheduled for December 28 in Cairo. A RIA Novosti reporter informs, Khelil’s statement made in Algeria, was circulated through OPEC general secretariat in Vienna on Friday. OPEC president says, all members of the oil cartel will make a decision on oil export reduction. At the same time, the 118th conference in Vienna decreed to reduce export quotas for oil resources by 1.5 million barrel a day starting with January 2002.

In Khelil’s words, large oil producers, such as Russia, Mexico, Norway, Oman and Angola plan to reduce their total oil export by 450 000 barrel a day. OPEC president disagrees with the showing, as the oil cartel asked for a 0.5 million barrel reduction. Chakib Khelil says, now the cartel faces a very complicated situation.

Even if OPEC oil and energy ministers come to an agreement on oil quotas reduction at the session in Vienna, terms of the agreement’s realization are not clear. Mr.Khelil thinks, it will be possible to implement the decision not earlier than February 1, 2002. At the same time, OPEC president is optimistic about possible rise in prices for crude oil in the nearest future. This is to be caused by a great demand for oil resources in winter, as usual.

Dmitry Litvinovich PRAVDA.Ru

Translated by Maria Gousseva

In the photo: Chakib Khelil

Read the original in Russian: