OPEC Secretary General Mohammed Barkindo offered the market another treat today, saying that Russia is “
This assurance, following numerous other OPEC assurances, comes after a brutal week for oil prices, and in true OPEC form, it is now in a desperation push to keep oil prices from further tanking.
Absent from the story is any news directly from Russia, which seems to be not only flip-flopping in its stance, but a country divided on the issue, with Vladimir Putin, Energy Minister Alexander Novak, and Rosneft’s Igor Sechin having seemingly different viewpoints on the subject.
Since Putin said in early October that Russia would
A day after Putin proclaimed that Russia would back a possible OPEC deal if OPEC were ever to get its own ducks in a row, Rosneft’s Sechin said that his company would never
Energy Minister Novak entered the game of dropping comments and interviews a week later, saying that
Since mid-October, Novak has been less and less specific in his comments on OPEC talks and possible deals.
Ironically, Russia’s waffling between producing at maximum levels and freezing production seems to mirror the Saudi’s waffling of the exact same nature, which has repeatedly committed to a freeze with one side of its mouth, and
And while several OPEC nations are currently in desperation mode regarding low oil prices, which are breaking economic backs, Russia appears to be much better positioned,
This breakeven price suggests that Russia is neither desperate or motivated to push for an OPEC-non-OPEC deal on production limits; it’s rather Russia playing the waiting game to see if ‘a joint action’ to stabilize the oil market will mean a winning hand for it in the longer run.
Russia is increasing production and waiting for the OPEC producers to reach a deal first, and if (a very big ‘if’) the cartel were to reach a common stance, Russia would enter the ‘freeze-now’ game with
Russia’s oil production in October was a post-Soviet era high at 11.2 million bpd.
In theory, Russia could be ‘on board’ for a deal with OPEC, but it would not shoot itself in the foot by sacrificing market share to reach said agreement.
However, before any Russian ‘commitment’, ‘effort’, or ‘joining a deal’, OPEC needs to sort out its own infighting, regional rivalry, bickering, pleas for exemption, and disputes over which data to use to calculate the members’ output.
By Tsvetana Paraskova for Oilprice.com
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