(Adds detail, trader's comments)
MOSCOW, March 4 (Reuters) - Russia's largest oil producer,Rosneft, said on Friday it plans to increase oilsupplies to Europe via the Druzhba pipeline by 3-5 percent thisyear to up to 29 million tonnes, thanks to a better economicenvironment in the region.
Traders, however, said Rosneft would have to cut prices amidsevere competition from rivals such as Iraq and Saudi Arabia whoare tapping new markets in Europe, traditionally dominated byRussia.
"The market has turned around, various alternative gradesare now on offer. This is a buyer's market now. You have tosecure the market to sell, and you have to pay for it," onetrader said.
A global battle is under way among oil exporters for marketshare, with producers with the deepest pockets such as SaudiArabia using low prices to enter new markets, often at theexpense of Russia.
Rosneft Chief Executive Igor Sechin recognised the challengefacing his company at an investor conference in October. "We areworking under conditions of tough competition," he said.
Rosneft said on Friday raising exports to Europe wouldrequire increasing oil supplies to Germany, Poland and the CzechRepublic this year. In 2015 Rosneft boosted supplies to 28million tonnes, from 26.5 million tonnes in 2014.
Last year, Rosneft signed deals to increase supplies toPoland's PKN Orlen and Grupa Lotos S.A by 2.4million tonnes and 300,000 tonnes per year respectively. Rosnefthas also agreed to ship 4.8 million tonnes annually in the nexttwo years to Total Oil Trading in Germany. (Reporting by Vladimir Soldatkin and Gleb Gorodyankin; Editingby Jack Stubbs and Dale Hudson)
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