MOSCOW, March 10. The representative of China, the largest importer of oil after the U.S., may participate in a meeting of the countries-oil producers to stabilize production as an observer, said sources familiar with the negotiations.
“This possibility has been discussed,” said a source close to the leadership of one of the oil producing countries planning to participate in the meeting. Another source confirmed the discussions of China’s participation in the meeting.
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The Russian energy Ministry has not commented on the possibility of participation of representatives of China in the meeting.
Meeting, the purpose of which is to stabilize oil prices, may take place in the period from 20 March to 1 April. In January 2016, oil prices fell to 12-year low, depriving the oil-producing countries a significant part of the income.
According to Russian energy Minister Alexander Novak, the participants are considering holding such a meeting in Doha, Vienna or Russia. The Minister said that Russia is ready to host such a meeting. Consultation on the place and date of the meeting continue.
At the meeting of oil producers could decide to freeze the production throughout the entire year at the level of January. At a meeting in Qatar on 16 February, the Ministers of oil of Saudi Arabia, Qatar, Venezuela and Russia expressed readiness to maintain oil production at the level of January of the current year, if other countries-oil producers will join this initiative.
One important consideration for making decisions on stabilization of production is the monitoring of compliance with agreements.
Consumers should participate in the arrangements
According to the data, 2015, China imported 309 million tonnes of oil, while the U.S. imported 365 million tonnes, According to individual months of the past year, China outpaced the U.S. in terms of imports.
Some market participants said in recent years that the countries-consumers of oil should participate in the arrangements for the regulation of the market. Currently the only organization that regulates the world oil market is the Organization of countries-exporters (OPEC), but its impact drops sharply because of disagreements between members and the growth of shale oil in the United States.
In the opinion of market participants and experts, the participation of users will allow better control of the balance between supply and demand on the market.
According to sources, China is the only major user that may participate in the meeting.
Nowak, as special representative of the Chairman of the government of the Russian Federation Dmitry Medvedev will hold talks with the head of State energy management of China Nur Bekri March 11. The Ministry of energy of Russia reported that the main issues during the visit Nowak in China will be the cooperation between the countries in gas, oil, coal and electricity sectors.
After that, Novak will visit Iran and hold talks with Minister of oil of Iran Bizhan Namdar Zangane.
According to observers, participation of the Islamic Republic in resolving the issue about the freezing of production is critical for decision making. Iran has so far refused to join the initiative, insisting on the resumption of production at levels that existed before the country imposed international sanctions because of its nuclear program.