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Monday, 26 November, 2001, 16:59 GMT
Press questions Russia's oil policy
Russian President Boris Yeltsin and Prime Minister Mikhail Kasyanov discuss oil cuts
Russian leaders discuss oil cut
Moscow's decision to cut oil exports by a mere 50,000 barrels a day has received a mixed reaction in the Russian press and provoked bewilderment in Saudi Arabia.

Rossiskaya Gazeta, Russia's government newspaper, puts a gloss on the announcement, which came after Russia had hinted it wanted to help drive up the price.

A slap in the face for Opec


"Yesterday's worst predictions failed to materialise," it writes.

"Thanks to Opec, Russia and Norway, oil prices have bounced back."

The paper says the Kremlin triumphed in the face of arm-twisting and dirty tricks.

Opec had presented an ultimatum to Russia to cut its output by at least 250,000 barrels a day, it writes, but "Moscow stood its ground and forced the oil club to back down".

Russia's bottom line

The tabloid Moskovsky Komsomolets explains that Russia is not prepared to slash its output.

While Opec seeks a price of between $22 and $28 a barrel, Moscow "thinks between 18 and 20 dollars is fine".

Next year's Russian budget is already based on a price band of $18.5 to $23.5 a barrel, the paper notes, and Moscow can afford to keep to its own price:

The Saudis can't afford to get into a price war with us

Russia's Moskovsky Komsomolets

"Oil accounts for 40 per cent of our budget but 80 per cent of Saudi Arabia's, so the Saudis can't afford to get into a price war with us. For that reason, there won't be any large-scale Russian cutbacks."

The prominent Russian broadsheet Izvestiya points out that Norway, while "not an admirer of Opec", agreed to cut its output by 100,000 barrels a day but Moscow had delivered "a slap in the face for Opec".

The paper also quotes industry analysts who point out that it is possible to "announce a cut in exports but continue to get your oil to market - for example, by re-exporting from [other ex-Soviet] countries".

'Meaningless cut'

The broadsheet Nezavisimaya Gazeta is unhappy with the way the Kremlin has behaved.

"Promising to cut output to calm the market and with 'trust-me' eyes pledging constructive cooperation with Opec isn't the same as actually doing it," it writes.

"Yesterday's new crisis on the global oil market was more or less Russia's fault.

"The price collapsed in five minutes ... What's worse, at the beginning of the day the deluded market honestly believed Russia would act with Opec and the other independent producers to end the turmoil."

Russian oil moguls seem to have no sense of the damage that unstable oil prices are inflicting on the world economy

Saudi Arabia's Arab News

The 50,000-barrel cut had been announced after a skilful PR campaign about fair prices for oil and hinting at real export cutbacks, it says, "and the markets believed us".

A Saudi daily, Arab News, describes Russia's announce cut as "useless in the present crisis".

The cutback represents "just 0.8 per cent of overall Russian output", yet oil-producing countries had hoped that "between Norway, Mexico and Russia, cuts of half a million barrels a day could be agreed".

But Russia's proffered 50,000 barrels a day is "anything but a serious decrease".

"In the murky world of Russian business... Russian oil moguls seem to have no sense of the damage that unstable oil prices are inflicting on the world economy," the paper says.

"The lessons of global oversupply seem to be completely lost on them."

BBC Monitoring, based in Caversham in southern England, selects and translates information from radio, television, press, news agencies and the Internet from 150 countries in more than 70 languages.

Gwyn Prins of the European Institute
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See also:

23 Nov 01 | Business
Oil's tumultuous week
20 Nov 01 | Business
Hopes for Russia deal with Opec
16 Nov 01 | Business
Russia's threat to Opec deal
15 Nov 01 | Business
Russia defies Opec oil cartel
14 Nov 01 | Business
Opec piles pressure on Russia
12 Nov 01 | Business
Russia declines oil export cuts
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