Dec. 26 (Bloomberg) -- The Organization of Petroleum Exporting Countries and Russia agreed today to hold annual ministerial meetings in an effort to improve oil market transparency as Russia assumes Group of Eight leadership.

The decision was reached during talks in Moscow today between OPEC President Sheikh Ahmad Fahd al-Sabah and Russian Energy Minister Viktor Khristenko, ministry spokesman Vasily Osmakov said in a telephone interview. Annual talks will cover energy policies, information exchange, investment in oil production and refining, as well as market developments, the ministry said in a statement.

Russia, one of the world's two biggest oil producers with OPEC member Saudi Arabia, raised oil output to 9.63 million barrels a day last month, according to Energy Ministry data. Vladimir Putin, Russia's president, is using the country's position as a major oil producer to help secure a greater role in international politics.

``Putin's government sees a real opportunity to become a bridge between OPEC and the net consumers of the G-8,'' Chris Weafer, chief strategist at Alfa Bank, said by telephone from London. ``This could widen the relationship model between consumers and producers from U.S.-Saudi to G-8-OPEC, benefiting consumers by improving supply planning and price stability.''

OPEC's 11 members, which supply about 40 percent of the world's oil, may cut production after March to offset a possible decline in demand and sustain world oil prices, al-Sabah said Dec. 22 in Beijing. Demand for oil from OPEC in the second quarter may decline as much as 7 percent to 27.8 million barrels a day on rising temperatures in the Northern Hemisphere, which reduces demand for heating oil, he said then.

Energy Security

Russia has begun meeting with major oil consumers, such as the U.S., Japan, the European Union, India, China and South Korea, ahead of next year's G-8 summit in St. Petersburg, Khristenko said in remarks confirmed by Osmakov.

Russia has made energy security a priority for the G-8 next year and will encourage members to increase the use of exchanges for trading energy commodities and diversify supply channels, Deputy Finance Minister Sergei Storchak told Bloomberg Dec. 3. India, China and Brazil, which aren't members, will be invited to next year's G-8 meetings in Moscow and St. Petersburg, he said.

Al-Sabah, who is Kuwait's oil minister, also held a meeting today with Russian Foreign Minister Sergey Lavrov, Interfax said. Russia plans to lobby the interests of oil producers with the G-8 countries, the news service said, citing Lavrov.

Oil prices are more dependent now on lack of refining capacity, which consumers should take responsibility for, than on supply and demand, Interfax reported today, citing Al-Sabah.

Oil producers are capable and willing to meet consumers' growing needs, al-Sabah told the Vremya Novostei newspaper.

Saudi Arabia's oil output was about 9.62 million barrels a day the same month, according to Bloomberg estimates.

To contact the reporter on this story: Torrey Clark in Moscow at tclark8@bloomberg.net.

Last Updated: December 26, 2005 11:04 EST