Putin Says Russia Ready to Freeze Oil Output at Current Levels

Russian President Vladimir Putin said he sees no obstacles to an OPEC agreement this month after oil exporters made major progress in overcoming differences as he reaffirmed Russia is willing to freeze crude output at current levels.

“Whether an agreement will be reached, I can’t say 100%, but there’s a strong likelihood that it will be achieved,” Putin told reporters on Sunday after attending the Asia-Pacific Economic Cooperation summit in Lima, Bloomberg reported.

“The main contradictions within OPEC, if they’re not yet eliminated, can be eliminated.”

After initial negotiations aimed at freezing production failed in April, a preliminary deal was reached in Algiers on Sept. 28 that ended two years of OPEC members pumping without limits.

Although the organization’s pledge to cut output must still be finalized, Russia has added more than 400 billion rubles ($6 billion) in projected budget revenue based on the talks, according to two officials familiar with the government’s calculations.

“There’s no difficulty for us to freeze production,” Putin said, repeating Russia’s position. "We said numerous times we are ready to freeze production at the level it is at right now. We do not expect our energy sector to take any damage from this."

The world’s biggest energy exporter is struggling to pull out of its deepest recession in two decades after a slump in oil prices and international sanctions over its annexation of Crimea in 2014.

In addition to the OPEC talks, closer ties with the US under Donald Trump’s incoming administration may also help Russia ease pressure on its economy.

Average daily crude production in Russia rose 0.1% in October to 11.2 million barrels, breaking the post-Soviet record for the second consecutive month, according to data released by the energy ministry.

Russia pumped over 47 million tons of crude in October, 3.9% more than the same period a year ago.

The report showed oil major Rosneft increased output by 0.1%, Lukoil production rose by 0.9%, while Surgutneftegaz cut its output by 0.3%. Production was boosted by an increase in drilling as oil companies are trying to capitalize on a weaker ruble. Russian oil companies make most of their revenue in US dollars, while their domestic costs are in rubles.