Major oil-producing countries should cut production to lift the falling prices of crude oil, Russian state-run Rosneft’s CEO Igor Sechin said Wednesday at the International Petroleum Week conference in London.

Major players consider production freeze

MOSCOW, February 12, 2016 – Major oil-producing countries should cut production to lift the falling prices of crude oil, Russian state-run Rosneft’s CEO Igor Sechin said Wednesday at the International Petroleum Week conference in London.

“A co-ordinated supply cut by major exporters by around 1 million barrels per day would sharply reduce uncertainty and would move the market towards reasonable pricing levels,” he stated. He estimated that oversupply had reached 1.5 million bopd globally.

An output reduction could curb plunging prices, which hit a 12-year low of USD 27.10 last month, while allowing countries to continue supply and keep market share.

The close ally of Russian President Vladimir Putin also maintains that the global oil glut is the fault of OPEC. The government official had previously expressed Moscow’s opposition to work with OPEC, saying that Russia’s oil industry could maintain itself despite the price rout due to inexpensive labour and a weak ruble.

Sechin also commented on the boom in US shale fracking production, which has contributed to the glut as well. “Shale oil production has its limitations in scope and time,” he said. “US shale oil production will reach its peak in 2020.”

Venezuelan Oil Minister Eulogio Del Pino also suggested limiting output during his tour of oil-producing countries including Russia, Iran, Qatar and Saudi Arabia this month.

In a meeting with Saudi Oil Minister Ali Al Naimi, the idea was reportedly met with some openness, particularly if Iran agrees to participate. Iran and Iraq have both announced the intention of boosting output this year. Kuwait plans to raise crude oil production by 150,000 bopd by this year’s Q3.

Venezuela has been vying to expedite the scheduled date for OPEC’s next regular summit in June for co-ordinated talks on the proposal.

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