... decision of OPEC+ to cut production. Back in February 2023, Deputy Prime Minister Alexander Novak, who is in charge of the energy sector, announced the decision of the national leadership to voluntarily reduce production by 500 thousand bpd. That is, Russia would have cut oil production anyway. But the fact that OPEC+ partners are now joining this thrust means that concerted action will have a much greater impact on the market, keeping oil prices at a high level. Russia has its own reasons for the decision to cut production. The country’s leadership is trying ...
... President Donald Trump, perhaps prematurely, announced via Twitter that Saudi Arabia and Russia appeared
ready to compromise
on production cutbacks. But some analysts warned that the Saudis seemed "
much more measured
" in their statements.
Russia has withdrawn
from the OPEC+ deal among oil-producing nations to cut production and regulate the market, and Saudi Arabia announced earlier this week it would increase its oil output. The breakup not only sent the market into a spin, but it also triggered a controversial reaction in Russia....
On July 23, 2017, Russia’s Energy Minister Alexander Novak told the Financial Times that Libya should join the oil supply production cut agreement brokered by Moscow and OPEC last December. Russia’s decision to target Libya, alongside Nigeria and US shale gas, surprised some observers, as Moscow retains tight links to military chieftain Khalifa Haftar, who holds de facto control over many of Libya’s oil-producing eastern regions and ...
... audiences. The idea might be to put the former on high alert over the possibility of a new alliance, while reassuring the latter that their respective countries have important new partners. We may, therefore, assume that the recent intensification of Russian-Saudi energy dialogue is nothing more than a forced temporary friendship.
1
.
OPEC Monthly Oil Market Report – November 2016
, pp 44, 57.
... inclination of participating countries to view the agreement on the production freeze as non-binding, or the refusal of all to agree on the same time periods, etc.)
The US Shale Oil Revolution as a Factor
Notwithstanding all above-discussed possibilities of Russia and OPEC to influence the oil price in ways advantageous to them, analysts point to risk factors possibly undermining the future appreciation of the oil price.
Even though oil prices have possibly already reached, or will soon reach, their floor, it is obvious that a price in ...
... January 11, 2016 (production is expected to be frozen at the level reached during this period), production hit an
all-time high
: Russia was producing 10.9 million barrels a day; Saudi Arabia 10.091 million barrels; and OPEC 32.3 million barrels, far in excess of its quota. So, even if the agreement comes into force, no serious price growth should be expected, and there will still be an oil glut in the market.
Even if the agreement comes into force, no serious price growth should be expected, and there will still ...
... rapidly growing economies, and therefore they see no reason to revise their policy. Hence, the next OPEC meeting and, accordingly, any major changes in the oil market, should not be expected before the end of October.
Factor 4: Russia’s policy
, Russia has stepped up oil exports even faster than OPEC: in the first six months of the year it increased exports by almost 10 percent and ranks top in in the production of this type of fuel.
It is obvious that Russia had to follow the general trend of increasing oil production. In this environment, ...
... least declare its intention to do so in 2015.
REUTERS/Leonhard Foeger
In any case, it would suit the bureaucracy of
OPEC. When the organisation’s status is inflated
it benefits those who work for it.
But this will only have an impact if other oil producers that are not part of OPEC, for example Russia, also reduce their output. The author understands that Rosneft’s chief Igor Sechin was discussing such an idea with his foreign colleagues in the run-up to the meeting of the cartel. Russia’s Energy Minister Alexander Novak mentioned ...
... nor that they are immoral (as it is trendy to bicker online), as in reality they have little choice and China anxiously needs oil as the memory of early 2000s energy famish is still fresh. Basically, China cannot trade with OPEC smoothly as it does not give special treatment via some sort of guaranteed quotas and rivalry is fierce from traditional majors who have cemented their place over the past century. Moreover, Russia opposes equity investment and it is not corrupt to an extent that it sells major assets, nor can China engage Europe or ...
... could it as it holds relatively minor amount of global oil reserves – which are depleting quickly.
Russia may have emerged from the ashes of USSR, but it was far from a Phoenix as during 4-5 stages it once again had little sway – obviously Russia makes the most oil in the world, occasionally swapping places with Saudi Arabia for the top branch, but the Saudis wield OPEC which allows them to work more or less as a unit. In a way the situation has worsened as during the 1-3 stages oil markets were undeveloped, so being a price-taker still gave time to catch up, now the mature market has less scope for revolutionary ...
