Vladimir Putin Voices Support For OPEC+ Oil Cuts Yet Warns Of Risks
Russia’s oil-production cuts made in cooperation with OPEC partners have supported the nation’s revenue yet may result in a loss of the market share, said President Vladimir Putin.
(Bloomberg) -- Russia’s oil-production cuts made in cooperation with OPEC partners have supported the nation’s revenue yet may result in a loss of the market share, said President Vladimir Putin.
“OPEC+ does help us hold up the oil price and ensure budget revenue,” Putin said at the meeting with winners of a governmental competition on Tuesday that was shown on Rossiya 24 state TV. “Yet the output is dropping while it grows in other countries such as the US, and we may lose markets.”
Putin emphasized that Russia’s cooperation with OPEC+ has his full support, and said he was noting the risk of losing market share only to express “an alternative point of view.”
Russia’s oil and gas industry provides a key source of state funds, which have been under pressure from the rising military cost of Moscow’s invasion of Ukraine. In retaliation for the invasion, Western countries imposed several waves of sanctions, including a cap on the price of the nation’s petroleum exports, aimed at curbing Moscow’s revenue without disrupting Russian oil flows into the global market.
Russia, together with Saudi Arabia, is a de-facto leader of the alliance between the Organization of Petroleum Exporting Countries and several other global oil producers. Earlier this month, OPEC+ nations extended their supply curbs into the second quarter, with Russia, which earlier committed to cutting both production and exports, pledging to focus more on output.
Crude prices have stabilized this year near $80 a barrel in London amid competing bullish and bearish signals. While geopolitical tensions in the Middle East remain high, there are questions about the demand outlook for top oil importer China, while oil production outside the OPEC+ alliance is growing.
Russia has pledged to make an additional production cut in April of 350,000 barrels a day, while paring the reduction in its exports to 121,000 barrels a day from 500,000 previously. In May, it will withhold 400,000 barrels a day of production and 71,000 of exports. In June, 471,000 barrels a day of curbs will come from production only.
These curbs will come on top of a previous 500,000 barrel a day production cut, which Russia has pledged to keep through the whole of 2024.
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