MOSCOW, Nov 28: Russian Energy Minister Igor Yusufov and his US counterpart Spencer Abraham agreed on Wednesday that global oil prices “must be just” and strictly dictated by market mechanisms.
Yusufov and Abraham met behind closed doors to discuss the turbulence in global energy prices and the potential for future US investment in the Russian oil and gas sector.
The Russian energy ministry disclosed few details of the talks, noting in part that the Yusufov and Abraham had agreed to set up a new working group to help correlate the two nations’ energy policies.
“Yusufov told his counterpart that the price of crude oil must be just, that is taking in mind the interests of both the producers and consumers,” the energy ministry said in a statement.
“Abraham supported this position, for his part noting that the price of oil should be dictated by market mechanisms,” the statement concluded.
Russia, which is not a member of Opec, has resisted pressure from the oil cartel to slash its production in a bid to support the weakened energy prices on international markets.
The United States, meanwhile, has hinted that it supports the stance of Russia, which is the world’s number two oil exporter, because low oil prices could help revitalize the slowing global economic growth.
Russia has agreed to cut its production by only 50,000 barrel per day through the end of the year, about one-fifth of the reduction sought by Opec and just seven per cent of its total exports.
However, senior officials hinted this week that a further Russian cutback could be expected early next year, although no formal decision on the subject has yet been reached.
Abraham’s visit to Moscow coincided with the formal opening of a major new Eurasian pipeline, amid growing signs that energy interests of the two global rivals were aligning at last.
Oil analysts said the launch of the Caspian Pipeline Consortium (CPC) signalled that Russia and the United States no longer view each other as serious rivals in a “great game” power struggle over control of oil prices in the isolated but energy-rich Central Asian region.
The CPC, which stretches 1,510 km (905 miles) from Kazakhstan’s giant Tengiz oil field to the Russian Black Sea port of Novorossiisk, will deliver nearly 70 million tons of crude to world markets when fully operational.
Officials stressed that the CPC’s formal launch did not mean that either Russia’s or Kazakhstan’s oil exports were on the rise, although analysts said the new pipeline meant that Russia was now free to increase exports through existing links that had been previously filled with Tengiz oil.—AFP
