Russia Putin OPEC+ cuts stay
Putin signals that OPEC+ coordination will continue to ensure predictability in the oil market and suggests supply cuts will endure until 2024.
In a conference held in Moscow, Russian President Vladimir Putin expressed his commitment to continuing coordination within OPEC+ to ensure predictability in the oil market. OPEC+, which includes the Organization of the Petroleum Exporting Countries and allies led by Russia, accounts for approximately 40% of global crude oil production. Currently, there is an agreement in place to limit supplies until the end of 2024.
Putin emphasized the importance of OPEC+ partners' actions in maintaining stability in the oil market, which ultimately benefits all of humanity. He assured that members of OPEC+ would fulfill their commitments and successfully overcome any challenges that may arise.
When asked about the possibility of extending the agreement to cut supply, Putin responded that it is likely to happen, but decisions will be made through consensus after consulting with colleagues. He expressed confidence in the continuation of cooperation among OPEC+ members.
These statements from Putin indicate that OPEC+ supply cuts will likely persist beyond 2024, which is expected to support oil prices and benefit Russia. In fact, Saudi Arabia and Russia, the world's top two oil exporters, recently discussed the oil market situation and prices amidst the escalating conflict between Israel and Hamas.
OPEC was originally founded in 1960 by Iraq, Iran, Kuwait, Saudi Arabia, and Venezuela, and has since expanded to include 13 members. In 2016, OPEC formed a partnership with 10 other oil producers, including Russia, to create OPEC+. Over the years, Russia and Saudi Arabia have collaborated on supply cuts, both within OPEC+ and through separate agreements, to stabilize oil prices.
Putin praised Saudi Crown Prince Mohammed bin Salman and highlighted the importance of seeking consensus in extending OPEC+ cuts. He acknowledged the possibility of further actions to stabilize the markets in the future, depending on the global economy. Without significant supply cuts, Putin warned that oil prices would likely drop below $50 per barrel.
Putin also criticized Western elites for causing confusion in energy markets and emphasized the need for responsible market participants like OPEC+ to ensure stability. He called for open and transparent cooperation among major oil suppliers.
In conclusion, Putin's remarks reflect his strong support for OPEC+ coordination and indicate that supply cuts will likely continue beyond 2024. This commitment is expected to support oil prices and benefit Russia. Putin emphasized the importance of stability in the oil market and criticized Western elites for their actions, calling for responsible market participants to correct any negative consequences.