Russia is considering cutting its oil production in a bid to revive prices, energy minister Alexander Novak said today as the falling price of crude along with Western sanctions over Ukraine have led to the ruble plunging in value.
"Is Russia ready to lower production to support prices? This question needs to be looked into carefully since the budget is strongly dependent on the price of oil," Novak was quoted as saying by Interfax news agency.
"There is no final decision," Novak said. "We are discussing the question. We are working inside the government on the expediency of such methods."
He said all oil exporting nations are concerned about the slump in oil prices.
"This calls for careful analysis and possibly the development of some coordinated actions," Novak said.
Russia gets around half of its revenues from oil profits and its non-diversified economy has been badly hit as global oil prices have fallen by more than 25 per cent since June, coming at the same time as the West imposed economic sanctions over Ukraine.
Novak said however that Russia's planned production figure of 525 million tonnes of oil for 2015 "had not been revised."
President Vladimir Putin said at the G20 Summit in Brisbane on Sunday that "the fall in oil prices does not affect Russia's budget."
"I am sure that for the year as a whole, the prices (for oil) will be the same as we calculated in our budget," Putin said.
Russia's budget for next year, passed by the lower house of parliament today, is based on an oil price of USD 96 per barrel.
Foreign Minister Sergei Lavrov said today that if oil suppliers "see supply or demand is being artificially distorted... Of course they have the right to take measures that will correct these non-objective factors."
"We take this as our basis, so do many of our partners," Lavrov said, after being asked to comment on Novak's statement.
Russia's oil extraction has exceeded 10 million barrels per day since 2010, rivalling top producer Saudi Arabia. However it has been predicted that its surge of production will fall next year due to factors including the depletion of key oil fields in West Siberia.
Western sanctions against Russia are now making it harder to gain financing and buy technology for exploration.
