Russia thumbed its nose at OPEC today, dismissing the oil cartel's demands that it join in slashing crude output to help revive sluggish global prices.
The world's second largest exporter after Saudi Arabia, Russia earlier this week offered a token cut of 30,000 barrels - under 0.5 per cent of output - and stressed today that it was not prepared to choke off supply much further.
Russia "will not make a large reduction" in crude production because this would contradict Russian oil policy, Prime Minister Mikhail Kasyanov said in Madrid.
The prime minister, on an official visit to Spain, added that Russia was prepared to continue similar cuts in output to "stabilise (oil) prices, keeping them within a reasonable range" of 20 to 25 dollars per barrel.
But he pointed out that Russia was not a member of the 11-member oil cartel and would pursue an oil policy that suited its own interests.
In particular, Moscow had an obligation under its partnership agreement with the European Union to provide a steady energy supply to EU countries.
The Organisation of Petroleum Exporting Countries (OPEC) agreed yesterday to slash output by 1.5 million barrels a day - more than six per cent - from January 1, 2002, but only if rival producers followed with a combined cut of their own of half a million barrels.
Mexico said that it would cut oil exports up to 100,000 barrels a day from January 1, if and when OPEC confirmed its conditional output cut and other producer countries do the same.
Norway for its part adopted a wait-and-see stance.
Russia, like Norway and Mexico, has been under intense pressure to join the oil producers' club in helping to stabilize faltering crude prices, which have plummeted 25 per cent since September 11.
Russian newspapers warned that OPEC's get-tough strategy could provoke a damaging price war that would push oil prices sharply down.
"An oil war has been declared against Russia," the daily Vremya Novosteiemblazoned on its front page. "Only the United States and Europe can help Russia to resist the ultimatum from OPEC," the paper said.
AFP