OPEC+ Alliance Maintains Production Policies

The Saudi-led OPEC and its allies in the Moscow-led OPEC Plus, maintained their strategy of slightly increasing oil production. (Photo: Reuters)
The Saudi-led OPEC and its allies in the Moscow-led OPEC Plus, maintained their strategy of slightly increasing oil production. (Photo: Reuters)
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OPEC+ Alliance Maintains Production Policies

The Saudi-led OPEC and its allies in the Moscow-led OPEC Plus, maintained their strategy of slightly increasing oil production. (Photo: Reuters)
The Saudi-led OPEC and its allies in the Moscow-led OPEC Plus, maintained their strategy of slightly increasing oil production. (Photo: Reuters)

The Saudi-led OPEC and its allies in the Moscow-led OPEC Plus, maintained their strategy of slightly increasing oil production, despite Western pressure to end the price volatility, as the war in Ukraine rocked the market.

The Organization of Petroleum Exporting Countries said in a statement on Thursday that it would boost output by 432,000 barrels per day in May, compared to 400,000 barrels a day during the previous months.

The coalition stated that the “modification” in production output was due to technical reasons.

At about 12:30 GMT, Brent North Sea crude was down 5.08 percent to $107.69 a barrel, while West Texas Intermediate crude fell 5.43 percent to $101.96, affected by press information about possible plans for massive withdrawals from American strategic reserves.

“It’s a sentiment shock, but if recent history suggests anything the reserve release will only be a temporary fix and akin to putting a band-aid on a broken leg,” said Stephen Innes, Managing Partner at SPI Asset Management.

The recent fall in prices has made it “even less likely” that OPEC+ will decide to step up production, said Carsten Fritsch, analyst at Commerzbank.

The White House was expected to announce a plan to release a million barrels a day for several months -- totaling up to 180 million, according to Bloomberg News.

“If such a gigantic release of emergency reserves actually happens, the oil market would no longer be undersupplied in the second quarter,” Fritsch said, adding that it would even be oversupplied in the third quarter.

For his part, Saudi Energy Minister Prince Abdulaziz bin Salman reiterated on Tuesday his commitment to OPEC Plus, saying that without this agreement, there would be no stability in the energy market, and “price volatility will worsen.”



Russian Central Bank Head Warns of Turbulent Times ahead Despite Slowing Inflation

Russia's Central Bank Governor Elvira Nabiullina attends a session of the St. Petersburg International Economic Forum (SPIEF) in Saint Petersburg, Russia, June 20, 2025. REUTERS/Anton Vaganov/File Photo
Russia's Central Bank Governor Elvira Nabiullina attends a session of the St. Petersburg International Economic Forum (SPIEF) in Saint Petersburg, Russia, June 20, 2025. REUTERS/Anton Vaganov/File Photo
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Russian Central Bank Head Warns of Turbulent Times ahead Despite Slowing Inflation

Russia's Central Bank Governor Elvira Nabiullina attends a session of the St. Petersburg International Economic Forum (SPIEF) in Saint Petersburg, Russia, June 20, 2025. REUTERS/Anton Vaganov/File Photo
Russia's Central Bank Governor Elvira Nabiullina attends a session of the St. Petersburg International Economic Forum (SPIEF) in Saint Petersburg, Russia, June 20, 2025. REUTERS/Anton Vaganov/File Photo

The Russian economy has adapted to Western sanctions and inflation is now slowing, but turbulent times and major technological shifts lie ahead, central bank governor Elvira Nabiullina said on Wednesday.

Despite the sanctions, the Russian economy grew by 4.3% last year but is set to slow sharply in 2025, with many officials and economists saying that the current model has exhausted its growth potential.

"We have adapted to some external challenges (but) no, we are facing very turbulent times ahead," said Nabiullina, who is widely credited with steering the Russian economy through the Ukraine military conflict and resulting sanctions.

"But I am confident that this also presents new opportunities for development and for increasing labor productivity in conditions of expensive labor. We base our efforts on this," she told a banking conference.

She stressed that the high cost of labor - spurred by the military spending that has led to a wage growth spiral in many sectors, as well as by curbs on immigration - would remain for a long time, Reuters reported.

Nabiullina said the economy should in future rely entirely on domestic sources of financing as cheap funding from abroad, abundant before the Ukraine conflict, is no longer available.

"In my view, structural adaptation to external constraints has been completed. We have demonstrated our ability to adapt to these challenges, but now we are facing structural shifts of an entirely new kind, primarily technological ones," she said.

"They may have even more far-reaching consequences than what we experienced over the past two years," Nabiullina said, mentioning artificial intelligence applications in the economy as one such challenge.

INFLATION SLOWING

The central bank, which has faced heavy criticism over its tight monetary policy, began cutting its key interest rate last month as prices started to come down, helped by the rouble's strength.

Nabiullina said inflation is now slowing faster than the central bank expected, and there are signs of easing in the severity of labor market shortages.

She said that if economic indicators pointed to a more significant slowdown than anticipated, the central bank would have room for bolder interest rate cuts. She dismissed statements by critics of the bank, who want deeper cuts, that the cooling of the economy was excessive.

Nabiullina also rejected statements from many businessman and bankers that the rouble is now overvalued and should weaken to please exporting companies, which saw their revenues shrink as the rouble rallied by over 40% against the dollar this year.

"A weak exchange rate is often a sign of vulnerability, a result of chronically high inflation and a lack of confidence in one’s own currency. It is hardly something to strive for," she said.