Valdai Club

After few months the need to freeze the oil production may become irrelevant, because the supply and demand balance will change.

On April 17, 2016, in Doha the oil-producing countries did not agree on a freezing of the oil production level. The OPEC countries are planning to hold next meeting in June in Vienna. In an exclusive interview for valdaiclub.com Alexander Novak, Russian Minister of Energy, said that after few months the need to freeze the oil production may become irrelevant, because the supply and demand balance will change.

"In my opinion, it is not necessary to be strongly upset that the signing of the agreement in Doha did not happen. According to our estimates, it could only accelerate the market rebalancing process for 3-6 months. Before new consultations we expect to receive assurances that the agreements, which are scheduled to be discussed, would be really achieved, "- said the Minister of Energy. He expressed doubt that the OPEC members would be able to reach consensus among themselves.

According to Novak, the market factors play a major role here. "The balance of supply and demand will change, it will be aligned as a result of low oil prices and lowering investment. In February, it was topical, in April it became less relevant. I do not exclude that in June it will be irrelevant in principle", - the minister said.

"As the possibility of consultations on freezing is becoming more remote, the shorter is the period to use such a mechanism, so over few months the need for such a freeze will already disappear by itself," - Novak said.

Russian Minister of Energy pointed out that failure to reach agreement on the oil production freezing does not mean that the bilateral relations between Russia and Saudi Arabia will change in the framework of economic and trade cooperation.

"We will continue to work to increase the trade turnover. Now it is very low, around $ 1.3 billion, the task is to reach $ 10 billion, "- the Minister said.

"It applies not only to energy, we have a lot of other areas of cooperation: in the field of medicine and industry, petrochemical industry, as well as in the field of agriculture, food supply and so on. In the current year the next meeting of the intergovernmental commission is expected, "- Novak said.