Speaking at a meeting of Opec oil ministers in Vienna, Abdullah al-Badri, the group’s secretary-general, said that he and other officials would hold a joint workshop with the Russians on global oil supply, demand and market issues. Russia already attends Opec meetings as an observer and was represented this week by Igor Sechin, the Deputy Prime Minister, who said that the Moscow talks would focus on “global energy security” matters and ensuring stable prices.
“Opec is one of Russia’s key partners on the global oil market,” Mr Sechin said. “It is very important for us to create mechanisms of regular dialogue.” He said that Russia had already presented Opec with a draft memorandum of understanding including a variety of proposals.
The prospect of closer ties between Opec, whose 13 member states produce 40 per cent of the world’s oil, and Russia, the world’s second-biggest producer after Saudi Arabia, will alarm consumer countries. Together, Opec and Russia would produce about half of the world’s oil, giving them even greater control over prices if they chose to collaborate.
Mr Badri sought to soothe concerns that the dialogue would have harmful consequences for consumer countries. “I don’t think our co-operation with Russia will affect the consumer because as far as we are concerned we are trying to encourage dialogue between producers and consumers,” he said.
Oil prices rallied briefly yesterday but dropped back below $100 after Opec said that it would stick to its existing production quota of 28.8 million barrels per day while calling on members to more rigidly adhere to their individual targets. Such a step, if observed, would amount to a reduction of about 520,000 barrels per day.
This is because some members are producing more than they are supposed to under agreed Opec targets.
October Brent crude fell $1.41 to $98.93 a barrel on the ICE Futures exchange yesterday after falling through $100 per barrel on Tuesday night for the first time since April.
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