A decision on cutting oil production is possible only if all crude-exporting nations are in agreement and there’s no timing for talks, Russia’s Energy Minister Alexander Novak said.

“We’re ready to discuss the issue of cutting oil output volumes” but not ready for a decision, Novak said Friday in an interview with Bloomberg Television. “We’re ready to consider the possibility; this should be a consensus. If there’s a consensus, it makes sense.”

Oil pared gains after Novak’s comments. Prices closed at the highest in three weeks on Thursday after Novak said that the Organization of Petroleum Exporting Countries and other producers may meet to discuss output. Traders have looked for signs of cooperation between producing nations after a global glut of crude pushed prices to a 12-year low. The head of OPEC this week called on producers outside the group to assist in reducing the oversupply, signaling once again its members won’t make output cuts alone.

“There’s no set date” for a meeting, Novak said. “As far as I understand they are discussing it with other possible participants.” Russia has taken part in such consultations before and “nothing new happened,” he said.

David Fuller's view

A carefully hedged statement, for sure.  We also know about all the rivalries, to put it mildly, between oil producers.  However, these considerations pale into insignificance against the background of today’s reality.

This is a ‘needs must’ situation for all countries which are heavily dependent (overly dependent) on oil exports.  The reality each of them faces is bankruptcy, without slashing government spending to dangerously low levels, if they do not soon have an all-party agreement to curb oil production below current demand. 

Some oil producers are already bankrupt because of poor governance.  Others, including even the most efficient and wealthy producers such as Saudi Arabia, risk exhausting their considerable financial reserves within approximately two years.  When the alternative is probable public uprisings and the toppling of governments, it is easier to overlook political and religious animosities and form a new agreement to control oil production.