Putin urges greater Russian role in oil prices

Prime Minister Vladimir Putin called Monday for Russia, the world's second largest oil exporter, to assume a greater role in influencing oil prices, Russian news agencies reported.

"It's clear that Russia, as one of the largest exporters and producers of oil and oil products, cannot sit on the sidelines in the process of how the global price for this commodity is formulated," Interfax quoted Putin as saying after a government meeting on energy issues. "We have to develop a full set of measures which will enable us to actively influence the market."

He did not say publicly what measures Russia could take.

Russian officials earlier said the government is considering setting up an oil reserve to influence prices, but stopped short of joining energy-producing cartel OPEC in production cuts to prop up flagging oil prices. U.S. crude is currently trading just above US$60 a barrel — off a July peak of US$147 a barrel.

Putin also offered some relief to major oil companies, which have complained that they are making a loss on their exports because of rapidly falling oil prices, by proposing to review export duties monthly rather than every two months.

Monthly monitoring of the export duty will start Dec. 1, Energy Minister Sergei Shmatko said later.

State-run pipeline monopoly Transneft said over the weekend that oil companies have trimmed back November exports by 25 percent.

Russia is facing its first annual decline in oil production in a decade as companies labor under a heavy tax burden and western Siberian oil fields mature. Oil majors have gone cap in hand to the government for loans to invest in production and exploration amid dire borrowing conditions globally.

Analysts at UralSib bank said Monday that oil tax cuts are vital if Russia is to maintain output and competitiveness.

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