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. Last Updated: 07/27/2016

Khristenko: Export Curbs Agreed Upon 'in Principle'

Deputy Prime Minister Viktor Khristenko said Wednesday that the government had agreed in principle to support OPEC by limiting crude oil exports until June, although analysts and traders said transport loopholes meant the assurances rang hollow.

Russia, the world's second-biggest oil exporter, agreed in December to cut exports from Jan. 1 to help the Organization of the Petroleum Exporting Countries boost flagging prices in the first quarter, and the cartel is anxious to secure a promise the curb will extend to the second quarter.

Khristenko said the final schedule would be agreed with oil firms next week.

"The technical breakdown of oil exports between oil firms maintains the export volumes of the first quarter, that is a cut of 150,000 barrels per day," he said after a meeting of the government commission on access to oil pipelines.

"The final decision on the second quarter is to be made by [Prime Minister Mikhail] Kasyanov," he said. "The meeting will take place approximately in a week."

Traders and analysts said the export schedule was irrelevant as even in the first quarter Russian oil firms managed to sidestep the OPEC agreement by exporting more crude by rail and ramping up exports of oil products.

Russia says its deal with OPEC applies only to exports through the state-owned Transneft pipeline and that it does not touch on refined products.

"This is a purely verbal commitment and a cut on paper, all it does is avoid another conflict with OPEC," said Vladislav Metnyov from Renaissance Capital.

Output is set to increase 5 percent this year from 7 million bpd in 2001. The excess volume can only flow abroad as the domestic market is saturated.

Metnyov said he believed Russia's mostly private oil firms would find new ways to bypass Transneft in the second quarter if the government decides to tighten its grip on supply curbs.

"Firms will be able to hide the reality until the end of June, when the crude export growth trend in Russia will become absolutely clear," he said.

Russia exported 3 million bpd of crude last year.