Experts Are Sure the Price Stability in the Oil Market Cannot Be Guaranteed

26 october 2015

A discussion regarding the development of the cooperation in the world oil market between Russia, OPEC countries and other big oil exporters was held at the Analytical Center. The discussion touched upon perspectives of cooperation of exporters in order to prevent high volatility of oil prices, as well as mechanisms for cooperation of oil export and import countries, in order to support the stability of the world oil market and steady development of the field.

Vladislav Onishchenko, the First Deputy Head of the Analytical Center, while opening the round table, noted that on the one side Russia and OPEC countries are competitors in the market, but on the other side, they must coordinate and build long-term relationships because development of the market in whole depends on their actions.

'At the moment the dialogue with OPEC became more intense. We are entering a new stage of cooperation between the countries,' said Ilya Galkin, the Director of the Department of International Cooperation in the Ministry of Energy of Russia. Recent corrections in the field caused by technological changes and appearance of new producers have lead to the fact that the oil market is entering a new course at the viewpoint of traditional exporters. This course is characterized by the competition not at the level of price and offer, but at the level of costs, efficiency of investments and technologies. At the moment for oil exporters the short-term analysis of the demand and offer balance is not so important as are the stability of the investment process and terms for the return of investments and replacement of the leaving stocks,' said the official. 'We are talking about fundamental issues. In this direction there are more bases for the cooperation and interaction. There are many ideas, but how to implement them will be clear only in the framework of uninterruptable dialogue between the countries,' considers Mr Galkin.

Vicente Paredez Torrealba, the embassador of Venezuela in Russia, reminded that Venezuela has big oil and gas resources. 'For more than one hundred years we have been developing and searching for oil. Now we are fighting for the independence and soverignty over natural resources, developing the energy diplomacy, actively working with various organizations in the sphere of energy. Oil prices have a great influence on the economy of Venezuela, and the country is trying to adjust itself to the current situation. At the moment it is important to find the fair and constant price for oil exporters,' the embassador said adding that Russia and Venezuela are leading the tight cooperation directed to the stabilization of the situation of the prices in the oil market.

Experts discussed the perspective spheres of interaction between Russia, OPEC and other exporters of oil, also talked about investments, researches and technologies. Some experts believe that the stable price in the field can not be reached as recource markets are characterized by the cyclicity. At the moment the cycle of growth is beginning, and the main issue is whose budget will stand the expectations. Such 'old recipies' as reduction of production will not help in the new reality, experts think, and there is no one single answer to the question of price perspectives, at least while the resource basis of the USA allows the production to grow.