OPEC still needs Russia to prop up oil markets, but the arguments for an even closer relationship with the cartel are weakening. The Kremlin’s two-year-long alliance with the 14-member group has been useful up to a point. On the one hand, oil diplomacy has helped to bolster President Vladimir Putin’s growing regional ambitions in the wider Middle East. On the other, Russia’s economy has also benefited from higher prices buffing up Putin’s financial credentials and popularity at home. Russia’s oil minister and Putin loyalist Alexander Novak is an advocate of the OPEC deal. He said this week oil prices would have dropped to levels below the $27/barrel recorded in 2016 without his country’s commitment to the group’s cuts and pledged his ongoing support for cooperation on supply. It’s a view not necessarily shared by everyone in Russia. Rosneft’s chief executive Igor Sechin has previously been a powerful critic of working with the cartel. “Reports this week indicate that the head of Rosneft continues to oppose ceding market share to the US, which may echo the opinion of others in the oil industry,” said Paul Sheldon, S&P Global Platts Analytics’ chief geopolitical adviser. “First, Russia’s budget still depends on oil revenues,… continue reading
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Source: CTRM Center