Oil companies insist on reduction of the export of petroleum products

The overnight drop in oil prices shocked the Russian oil companies. They are going to address to the government with a request to cut the export of petroleum products in order to avoid the further reduction of prices. This was said by Premier of the Russian Federation Government Mikhail Kasyanov today.

Kasyanov added that such a suggestion would comply with the interests of both the oil companies and the government, “which can not but listen to them.” The spokesmen for the oil companies currently negotiate with the Ministry for Energy; then they will have a meeting at Kasyanov’s office.

As Kasyanov mentioned, the government was not going to issue a certain decree on the matter, “we will simply agree with the suggestion from the oil companies’ rules of the game.” Speaking about the situation with the oil prices on the world markets, Kasyanov said that their reduction was lower “than the fair level.” The government thinks that a fair price for Urals oil would be on the level of $20-25 per barrel. At the same time, the premier said that the entire construction of the budgets of the current and the future years proceeded from the price of $18 per barrel, which was considered to be enough.

The situation on the exchange market had an instant reaction to the news. The demand for Russian oil shares during the afternoon increased at once after it became known that the Russian Federation Government would support the intention of the home oil companies to reduce the exporting volume with a view to stabilize the world oil prices.

There was such a situation in the 1970s when the world prices on oil dropped lower than their limit. The USSR did not decide to decrease oil production, vice versa - it started increasing the export. It did not take much to wait for the result – oil production suffered considerable losses, which made the collapse of the superpower come closer. Let us hope the present Russian government learned that lesson well, taking into consideration the fact they are well aware of the independence between the Russian budget and the oil money.

Dmitry Litvinovich PRAVDA.Ru