26 January 2018, Sweetcrude, Moscow — Vagit Alekperov, CEO of Russian oil major Lukoil has warned oil producing countries against the repercussion of pushing the oil cut agreement until oil reaches $150 per barrel.
Speaking to reporters on the sidelines of the World Economic Forum in Davos, the CEO, said although he believes OPEC’s oil production cut agreement will stabilise oil prices, however, urged the group and its partners to prevent their “explosive” growth up to $150 per barrel.
“It seems that the governments of the oil producing countries are not happy with $70 and the race for a “mechanical bunny” starts again. We must bring them [the prices] back to normal, to the level of 2011-2012, and then smoothly withdraw from the agreement,”Alekperov said.
“We should not allow an explosive jump in oil price when it was $140-150 again,” he stressed.
According to him, after a sharp drop in oil prices, OPEC countries said their projection was to have oil at $50 per barrel, however, adding that the producers seem not contented with that price anymore, leading to several extension of the agreement.
OPEC and Russia agreed to cut a total of 1.8 million barrels per day in output.
Under the agreement, Saudi Arabia and Russia have the biggest cutbacks, which are 486,000 barrels per day and 300,000 barrels per day, respectively.
The deal targeted at removing glut from the oil market was initially valid in the first half of 2017 but since then it has been extended twice: first – until the end of March 2018, and later – until the end of 2018.