Russian oil groups have agreed to freeze production levels as proposed last month by Moscow and Saudi Arabia to curb a near-record slump in prices, President Vladimir Putin said Tuesday. Opening a meeting with oil group chiefs, he said Energy Minister Alexander Novak had led discussions on forging an agreement between producer countries to maintain their output. "As the minister reported to me, you all agree with this proposal," Putin told them in comments released by the Kremlin, adding: "There are even more radical proposals but you don't all agree."
He said the idea was to "fix Russia's 2016 production level at that of January," which was a post-Soviet record of 10.8 million barrels per day on average. Saudi Arabia and Russia - two of the world's biggest oil producers - proposed after a February 16 meeting with Qatar and Venezuela that all producer countries freeze their output at January levels to support prices, provided that other major producers followed suit.
The news sparked hopes the market would stabilise after sinking to near 13-year lows last week on the stubborn supply glut - but disappointed those looking for an output cut. Despite Iran's refusal to play ball, oil prices have significantly recovered since, supported by the announcement of a new meeting in mid-March between Russia and Opec members Qatar, Venezuela and Saudi Arabia.