Why Russia does not reduce oil production

The regular government press releases that oil production in Russia has established a "new record" (in practice, the annual growth rate stably is 1.5%, which makes it possible to virtually every day to talk about the record) causes a question: why Russia continues to increase its production at low oil prices? Why does it help to maintain an excess of raw materials on the world market? Isn’t it possible to reduce the production and thereby to contribute to a rise in the prices?

The issue of target reducing the oil production by major producing countries pops up at every fall in the oil prices: this is waited for OPEC, from other countries, including Russia.
It is necessary to explain - why it doesn’t happen and is unlikely to happen.

First of all, the direct decisions on reduction / increase in production are made by operators of oil fields, i.e. oil companies. And it is not profitable for them. For the most part in the major exporting countries, the production costs are low today, and the companies continue to get good profits even at current world prices (we’ll talk later about the Russian oil economy). Yes, this profit would rise in the event of a rise in the prices, but none of the companies believes that their specific solutions to reduce the production can affect the market. When in 2001-2002, the Government discussed the topic of cooperation with OPEC to reduce the oil production, the companies’ leaders said: "The world price of oil is one big unknown, no one knows, why and how it is formed. We will reduce the production, lost revenue, and the price will remain the same as it was, or even fall". As a result, then the Government didn’t find a way to have a real impact on the companies in order to get them to reduce the production.