Rosneft sees risk of OPEC oil output deal non-prolongation

MOSCOW, Mar 13 (PRIME) -- There are risks that an oil output reduction agreement between OPEC and non-OPEC producers will not be prolonged, a spokesperson for oil major Rosneft told PRIME on Monday.

“Our position is that a long-term price stabilization must be based on agreements not only between producers, but also between the key consumers and global regulators,” the spokesperson said.

“This is again utterly improbable taken the current economic and political turbulence. In this respect, there are risks of non-prolongation of the agreement due to both the will of the key participants and dynamics of shale oil output in the U.S., which will barely want to become a participant of any agreements in the foreseeable future.”

He added that the agreement would be useful for the global economy and for the oil industry.

A long-term deal would be beneficial for the world economy and the oil industry.

“This is why we believe that the international oil price dynamics and falling investment in a period of excessively low prices will balance the market, but the risk of a price war persists,” the person said.

He said that Saudi Arabia’s goal of increasing its market share turned out to unattainable “because of the efficiency and as a consequence resilience of the Russian oil industry.”

The key threat to prolongation of the agreement is fast adaptation of U.S. shale oil producers to higher prices.

“There are reasons to believe that Saudi Arabia will preserve its interest to control over prices trying to find a balanced level, which, on the one hand, restores revenue shortfalls, and on the other curbs significant growth of shale production in the U.S.,” the representative said.

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