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. Last Updated: 07/27/2016

Oil Cartel May Replace Export Quota System

VIENNA -- Russia's Foreign Trade Ministry may form a cartel-type organization of oil exporters next year after existing methods of controlling exports are abolished, an adviser to the ministry said Tuesday.

New controls are inevitable to replace the system of export quotas, licenses and "special exporters," due to be scrapped on Jan. 1, 1995, said Mikhail Sarafanov during a break at an oil and gas conference.

"If the institute of special exporters is abolished in 1995, it will be reborn in some other form," he said.

Currently, all oil and oil-product exports must pass through one of the privileged special exporters, a group currently consisting of 21 companies registered with the ministry.

Those seeking to export must also obtain quotas from the Fuel and Energy Ministry and Economics Ministry, and licenses issued by the Foreign Trade Ministry.

Sarafanov, who is involved in the regular ministerial review process for determining which organizations should be entitled to export oil, said structural limitations on Russian sales abroad would prevent the world market from being flooded.

Russian export-pipeline and port handling capacity is only 85 million to 90 million tons a year and only about 100 million tons if facilities in other former Soviet republics were included.

Russia exported about 80 million tons of crude oil outside the former Soviet Union last year and this could rise to 90 million this year, according to official forecasts.

The Foreign Trade Ministry believes it is too early to scrap the special exporter system, a move which would significantly reduce its influence over vital oil exports.