Increased oil prices are predicted to provide an additional 1.5 trillion rubles ($26.1 billion) to the Russian budget in 2017, according to Russia's Energy Minister Alexander Novak on Thursday.
Speaking during an interview of Russian news agency Interfax, Novak identified the production cut agreement between OPEC and non-OPEC producer countries as one of the most important factors of the energy sector in 2016.
"Countries are required to fully comply with production cuts to make the agreement effective," he said.
In November last year, OPEC members unanimously agreed to lower oil production by 1.2 million barrels per day. Consequently, eleven non-OPEC oil producers agreed to cut oil output to achieve market stability at the joint ministerial meeting in December 2016.
"The OPEC agreement would not be realized, unless Russia played an active role in the oil production cut. The agreement could only become effective with full participation," he added.
Novak stressed that oil prices rose to $55 from the levels of $35-$40 with the oil output cut agreement.
The daily revenues of Russian oil companies also increased by $110 million from when the agreement became active, Novak noted.
Russian Energy Minister estimated that Russian companies will earn extra revenue of 700 billion rubles ($12.2 billion) in 2017 through increases in oil prices.
Russia continues to cut its oil production in February and is set to do so in March to reach its targeted level as per the agreement, Novak highlighted.
Russia pledged to lower oil production by 300,000 barrels per day in compliance with the agreement reached by OPEC and non-OPEC producers. The country reduced its daily production by 120 thousand barrels in January.
Reporting By Emre Gurkan Abay in Moscow
Writing by Dilara Zengin