Exporters disappointed even as Russia cuts oil

The Russian government cuts oil export duties on Saturday as it responds to the concerns of top producers who feared making losses on overseas shipments.

But the cut was far less than oil companies had wanted and it remained unclear whether they would proceed with November export plans or redirect their oil to the domestic market to avoid the duty.

"It was the minimum reduction and it does not significantly raise the appeal of exports," a source at one of Russia's oil companies said.

The duty was set at $287 per tonne from November 1, down from $372.20. That was the level decided by Russia's Finance Ministry.

The Finance Ministry, led by fiscal preys who are counting on income from Russia's oil resources to help control the effects of the global financial crisis, calculated its proposal to protect its budget requirements, the sources said.

Russia's top officials expect higher cuts

Russia's senior energy official, Deputy Prime Minister Igor Sechin, was backing a steeper cut to $195.20 per tonne, with the support of the oil industry lobby,sources added.

Prime Minister Vladimir Putin ordered proposals for a new formula for crude oil export tariffs, based on market prices, to be prepared by December.

World number two exporter Russia, alarmed by falling prices, has said it would not join OPEC oil producers' efforts to regulate prices by cutting production, but has said it would like closer ties with OPEC and more influence on prices.

OPEC decided late last month to cut around 5 percent of world oil supply to put a floor under prices. The cut has had a limited impact as concerns about global recession continued to exert pressure on prices.