Official: Russia has no plans to drop oil export restrictions

Posted 8:38AM on Tuesday 9th April 2002 ( 23 years ago )

MOSCOW - Russia has no immediate intention to boost oil exports because of Iraq's halt in crude exports, but will decide in mid-May whether to do so, a senior Cabinet official said Tuesday. Russia's aggressive young oil companies want to drop voluntary export restrictions that were agreed upon under OPEC pressure to stabilize world prices, because prices for exported oil significantly exceed Russian domestic prices. World prices jumped higher Monday after Iraq's move, which was aimed at showing support for the Palestinians in their conflict with Israel. But Deputy Prime Minister Viktor Khristenko warned that the price hike could be short-lived. "The prices are currently high, but factors that determine them can hardly be called stable and long-term," Khristenko said, according to the ITAR-Tass and Interfax news agencies. "It is erroneous and premature to draw instant conclusions." Khristenko said Russia would stick to its earlier approved exports regime for the second quarter while closely following the market situation. In mid-May, the Cabinet "will sum up the intermediate results of monitoring and come up with possible additional decisions on that basis," Khristenko said on a trip to Kazakhstan. The Russian Foreign Ministry issued a statement Tuesday saying that "Moscow is pondering possible consequences of the Iraqi leadership's decision to suspend oil exports for one month," and expressing concern over anything that exacerbates the situation in the Middle East. Alarmed by decreasing world prices for oil, the Organization of Petroleum Exporting Countries and the world's other major oil exporters -- Russia, Norway, Mexico and Angola -- have agreed to keep just under 2 million barrels a day off world markets until the end of June, although the non-OPEC producers have reserved the right to abandon the deal earlier. Under the deal, Russia is supposed to cut its crude exports through national pipelines by 150,000 barrels a day from the levels of the third quarter of 2001. Most of Russia's oil industry is eager to see the restrictions end. Domestic refineries are currently paying $4.50 a barrel while foreign lifters are paying $23 a barrel. The main losers from Iraq's decision Monday appear to be Russian oil companies which buy a large amount of Iraqi crude under the United Nations' oil-for-food program. Russia, Iraq's top trade partner and its closest ally on the Security Council, has long backed Baghdad's demand to lift the U.N. sanctions.

http://accesswdun.com/article/2002/4/196264