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. Last Updated: 07/27/2016

OPEC Says Crude Price War Unlikely

OPEC steered clear of a clash with Russia on Tuesday, playing down the prospect of a future price war despite concerns that the world's second-biggest oil exporter is biting into the cartel's market share.

OPEC Secretary-General Alvaro Silva, on a visit to Moscow, said the two sides will continue to cooperate but declined to comment on whether the cartel would make any output cuts conditional on similar action by non-OPEC nations.

"The main outcome of our meeting is that Russia offers to maintain its policies, which aim at stabilizing world oil prices," Silva said, speaking through an interpreter, after meeting Energy Minister Igor Yusufov. "We have no price war. OPEC's main aim is a [price] stabilizing policy."

OPEC's next output move is likely to be an increase for the fourth quarter.

The group's president, Rilwanu Lukman, said in July that Moscow, which has been selling ever more oil on the world market, would be foolish to think OPEC would sacrifice market share to Russia in the future and warned Moscow that the cartel would win any price war.

On Monday, Silva said the cartel saw Russia's oil exports as no threat to the stability of the market provided the two sides continued their cooperation.

Asked whether OPEC was concerned that Russia's output and exports were constantly rising while OPEC was keeping its production steady, Silva said: "These are the matters which are currently discussed."

Pressed on whether OPEC would make any oil output reduction in the future conditional on Russian cuts, he said: "OPEC considers its members and nonmembers as independent and sovereign states, which pursue their own interests."

"And we highly appreciate the current level of cooperation between OPEC and non-OPEC states."

Russia, where oil output has been on the rise for four years and whose energy exports are a major contributor to the budget, agreed to curb exports by 5 percent, or 150,000 barrels per day, in January to June to help prop up oil prices.

But it loosened the restrictions as early as March and officially abandoned the deal from July while OPEC opted to keep restrictions on oil supplies throughout the third quarter.

Yusufov said Russia based its current oil policies on the needs of both producers and consumers.

"Today there is no reason to talk about a looming price war [between Russia and OPEC]. We keep monitoring oil prices and are ready to extend our cooperation if needed," he said.