Lukoil CEO says prolonged $70 oil should trigger move to exit OPEC+ cuts
Lukoil CEO Vagit Alekperov said on Friday Russia should start exiting a global oil output cut deal if crude prices remain at $70 per barrel for more than six months.
Russia and Saudi Arabia are leading the wider OPEC and non-OPEC effort to limit oil production to prop up crude prices. Yet, oil that is too expensive could further encourage output from shale oil producers, putting pressure back on prices.
Brent crude oil futures, the international benchmark for oil prices, have risen by more than 50 percent since mid-2017, hitting $70 a barrel this week for the first since December 2014.
“If the price of $70 remains for more than half a year, we should start exiting smoothly,” Alekperov, also a major shareholder in the Russian firm Lukoil, told reporters.
Fatih Birol, head of the International Energy Agency, said on Friday that while oil prices at $65 to $70 a barrel was good for oil producers now, there was a risk that such a level would encourage more oversupply from U.S. shale drillers.
Alekperov said an oil price between $60 and $70 a barrel was comfortable for Russian oil firms. “We should not repeat mistakes of 2000s when oil price crossed over $100,” he said.
Source: Reuters (Reporting by Olesya Astakhova; Writing by Maria Tsvetkova and Katya Golubkova; Editing by Jack Stubbs and Edmund Blair)