June 27 (UPI) — A few days after Russia backed OPEC pledges on oil production, a Russian finance minister said Wednesday the pace of economic growth is accelerating.
Russian Energy Minister Alexander Novak sat next to his Saudi counterpart, Khalid al-Falih, at a regular meeting for the Organization of Petroleum Exporting Countries that wrapped up during the weekend in Vienna. OPEC and non-member states agreed to put more oil on the market in the second half of the year to buffer against production woes in Venezuela and potential shortages from Iran.
Russia is the largest non-OPEC contributor to an effort to stabilize the oil market through coordinated production efforts. Novak said during the weekend Russia could add about 175,000 barrels of oil per day to the market in the second half of the year.
Anton Siluanov, a deputy finance minister, said industrial production was growing along with real wages and growth this year should reach 2.1 percent.
“We see that inflation is falling compared to the planned figures,” he was quoted as saying by Russian news agency Tass.
At the current rate for Urals, the Russian benchmark for the price of oil, the extra barrels would yield about $12 million per day.
The Central Bank of Russia maintained its key rate at 7.25 percent per year earlier this month. The bank, in its statement on justifying the rate move, said it wasn’t concerned about volatility in the price of oil.
Oil prices have been fluid this year, trading in a range of around $62 per barrel to $80 per barrel for Brent, the global benchmark for the price of oil. Brent has rallied nearly 5 percent since Friday and was trading near $77 per barrel on Wednesday.
Russia’s economy lingered in recession in 2016 and the national currency, the ruble, declined in value after crude oil prices dipped below $30 per barrel.
Novak added from the sidelines of a natural gas conference in Washington D.C. that U.S. sanctions on Russia cut both ways.
“In my opinion, the sanctions currently have a negative impact on U.S. companies as well, preventing them from engaging in quite profitable and efficient projects in the Russian Federation,” he said.
Exxon Mobil in a March update to its 10-k filing to the Securities and Exchange Commission said it was complying with U.S. and European Union sanctions imposed in 2014 and expanded ones from the U.S. government last year by withdrawing from joint venture partnerships with Russian oil company Rosneft.