Russian President Vladimir Putin said on Wednesday that OPEC+ co-ordination would continue in order to ensure predictability on the oil market and signalled strongly that a deal to constrain supply to world markets was here to stay.
OPEC+, which groups the Organization of the Petroleum Exporting Countries and allies led by Russia, pumps around 40 per cent of the world’s crude. It currently has an agreement to limit supplies until the end of 2024.
“I am sure that the co-ordination of the OPEC+ partners’ actions will continue,” Putin told the “Russian Energy Week” conference in Moscow beside Iraqi Prime Minister Mohammed Shia Al-Sudani. Iraq is the world’s third largest oil exporter.
“This is important for the predictability of the oil market, and ultimately for the well-being of all mankind,” Putin said.
OPEC+ members, he said, would “fulfill their commitments in full and successfully cope with all challenges.”
Asked if the OPEC+ agreement to cut supply would be extended, Putin said: “Most likely. We need to consult with colleagues – our decisions are made by consensus.”
“Today it looks like we will continue our co-operation.”
The remarks are Putin’s strongest signal to date that OPEC+ supply cuts will endure well into 2024 and probably beyond – a step that is almost certain to support oil prices, a boon for the Kremlin.
Saudi Arabia and Russia, the world’s top two oil exporters, on Wednesday discussed the situation on the oil market and prices amid the escalating conflict between Israel and Hamas, Putin’s top oil official, Deputy Prime Minister Alexander Novak, said.
OPEC was founded in 1960 by Iraq, Iran, Kuwait, Saudi Arabia, and Venezuela and expanded to 13 members. In 2016, OPEC signed an agreement with 10 other oil producers, including Russia, to create OPEC+.
Russia and Saudi have co-ordinated supply cuts – both as part of OPEC+ and with side agreements – to support oil prices in recent years.
Putin praised Crown Prince Mohammed bin Salman and said that if there were differences on extending OPEC+ cuts, then the Kremlin would seek consensus.
“If there are differences in positions, we always look for consensus,” Putin said. “And in this sense, the Crown Prince of Saudi Arabia plays a very important role, he is very active in this regard.”
“Will it be necessary to do something together in order to stabilize the markets next year? Well, I don’t rule it out?”
Putin said it would be necessary to look at the world economy and cautioned that without major supply cuts “the price would most likely have gone below $50 per barrel”.
Putin said Western elites had sown confusion in energy markets so it was up to responsible market participants such as OPEC+ to ensure stability.
“For the stability of the oil market, the interaction of the main suppliers is necessary, and on open, transparent terms. And it is with this logic that Russia works with partners within the framework of OPEC+,” Putin said.
“The actions of some of our colleagues, the Western elites, have sown confusion on the global energy market, including on the oil market, the negative consequences of such politicized steps affect the entire global economy, now it has to be corrected, and, of course, responsible market participants have to do it,” Putin said.