MOSCOW (Reuters) - Russia is fiscally prepared to cope with a drop in oil prices, Finance Minister Anton Siluanov said on Thursday, as OPEC tries to convince Moscow to support the market with a deeper output cut in the wake of the coronavirus outbreak.

FILE PHOTO: Russian Finance Minister Anton Siluanov attends a meeting with members of the government chaired by Russian President Vladimir Putin, in Moscow, Russia February 5, 2020. Sputnik/Aleksey Nikolskyi/Kremlin via REUTERS

The Organization of the Petroleum Exporting Countries agreed on Thursday to cut oil output by an extra 1.5 million barrels per day (bpd) in the second quarter of 2020 to support prices, its largest reduction since the 2008 crisis, but made its action conditional on Russia and others joining in.

Russia has been reluctant to increase the existing 2.1 million bpd reduction by the group known as OPEC+, despite fears over demand with the coronavirus outbreak expected to hobble economic growth.

Siluanov did not say what Russia’s decision in regard to deeper oil output cuts might be.

In an interview published by the Tass news agency on Wednesday, Russian President Vladimir Putin blamed low oil prices on falling household incomes in Russia.

He said Russia had become less exposed to fluctuations in the oil market, but reducing the country’s reliance on its main export was not something that could be achieved quickly.

TREASURE CHEST

Russia in 2018 introduced a mechanism designed to shield it from economic consequences such as those seen in 2014 when, along with Western sanctions, falling oil prices hit the economy and the rouble.

Russia now diverts extra oil revenues to its National Wealth Fund (NWF) when oil prices are above $42.4 a barrel, allowing the country to accumulate state reserves.

Strict budgetary rules stipulate that Russia can only spend funds from its NWF when its reserves exceed 7% of the country’s GDP.

“Many people criticised us, they said this is a kind of treasure chest, that the finance ministry is sitting on gold and pining over it,” said Siluanov.

“But now the situation could change and we will finance all the expenses we have undertaken and are obliged to make with this treasure chest.”