Russia's government has openly blamed Opec members for the recent oil price crash after key producing states failed to agree on output curbs that would have supported prices.
In a statement released by the government following a meeting between Prime Minister Mikhail Mishustin and key Russian ministers to discuss measures to maintain "economic stability" in the country, Russia in particular singled out Opec kingpin Saudi Arabia for the breakdown in discussions on keeping existing oil production restrictions in place to the end of the second quarter.
Quoting Russian Energy Minister Alexander Novak, the statement said that “Opec partners decided to increase oil production and fight for a market share”.
Speaking on Tuesday in the capital Moscow, Novak said that Saudi Arabia, backed by several other Opec members, insisted on an additional output reduction of 1.5 million barrels per day to the existing cut, with this new restriction to be effective until the end of this year.
Novak added that Saudi authorities have refused to listen to a proposal from “Russia and several other non-Opec countries” to keep the existing cut of 2.3 million bpd intact until the end of the second quarter, with the purpose to “monitor the impact of coronavirus on economies of major energy consuming countries”.
“They [Opec] have resolved by themselves [without consulting with Russia]”, he said.
According to Novak, Russian authorities had anticipated a sharp reaction and a drop in the oil price, but added that they expect “a recovery in the next several months”.
Novak has also linked the near-term oil price movement with the spread and impact of coronavirus in Europe and the US.
Novak said that “doors [to Opec] have not been shut”, with Russia planning to continue consultations with the cartel and offer its participation in a planned meeting, expected to take place between May and June this year.
According to Novak, Russia has the potential to grow its oil production by between 200,000 and 300,000 bpd in the short term, with a longer term increase assessed at 500,000 bpd.
The Russian exit from the Opec+ agreement has already been welcomed by state-controlled Rosneft, which is the largest oil producer in the country.
The company has repeatedly complained about output restrictions imposed by the government.
A Rosneft spokesman told Moscow business daily RBK that Russian participation in the Opec reduction was “meaningless for Russian economic interests”, as it effectively supported US shale oil production that had been replacing output, removed from the global market by the cartel and Russia.
However, Russia's largest privately held oil producer Lukoil has been critical of the Russian exit from the Opec+ agreement.
Lukoil vice president Leonid Fedun said that the expected 2% to 3% growth in Russian oil production will not be sufficient to compensate for the loss of oil export revenues.
According to the Russian governmental statement, Finance Minister Anton Siluanov gave assurances that Russia has sufficient financial resources to maintain economic stability in the country and the implementation of state social obligations to citizens.
Industry analysts in Moscow expect tax payments to the federal budget by Russian oil companies to drop significantly in the second quarter because the direct tax take on oil production is directly linked to the oil price.