MOSCOW: Russia's largest oil producer, Rosneft, said on Friday it plans to increase oil supplies to Europe via the Druzhba pipeline by 3-5 percent this year to up to 29 million tonnes, thanks to a better economic environment in the region.
Traders, however, said Rosneft would have to cut prices amid severe competition from rivals such as Iraq and Saudi Arabia who are tapping new markets in Europe, traditionally dominated by Russia.
"The market has turned around, various alternative grades are now on offer.
This is a buyer's market now.
You have to secure the market to sell, and you have to pay for it," one trader said.
A global battle is under way among oil exporters for market share, with producers with the deepest pockets such as Saudi Arabia using low prices to enter new markets, often at the expense of Russia. Rosneft Chief Executive Igor Sechin recognised the challenge facing his company at an investor conference in October.
"We are working under conditions of tough competition," he said.
Rosneft said on Friday raising exports to Europe would require increasing oil supplies to Germany, Poland and the Czech Republic this year.
In 2015 Rosneft boosted supplies to 28 million tonnes, from 26.5 million tonnes in 2014.
Last year, Rosneft signed deals to increase supplies to Poland's PKN Orlen and Grupa Lotos S.A by 2.4 million tonnes and 300,000 tonnes per year respectively.
Rosneft has also agreed to ship 4.8 million tonnes annually in the next two years to Total Oil Trading in Germany.
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