Putin: Russia to Continue Cooperation with OPEC+

Russian President Vladimir Putin speaking at the Russian Energy Week forum in Moscow on Thursday (EPA)
Russian President Vladimir Putin speaking at the Russian Energy Week forum in Moscow on Thursday (EPA)
TT
20

Putin: Russia to Continue Cooperation with OPEC+

Russian President Vladimir Putin speaking at the Russian Energy Week forum in Moscow on Thursday (EPA)
Russian President Vladimir Putin speaking at the Russian Energy Week forum in Moscow on Thursday (EPA)

Russian President Vladimir Putin said on Thursday that his country will continue to develop cooperation with the Organization of the Petroleum Exporting Countries (OPEC) and its allies known as OPEC+, as well as members of the Gas Exporting Countries Forum (GECF).

Putin also said Russia is fulfilling its obligations to supply energy resources to the global market.

The Russian President was speaking at the Russian Energy Week before a panel of top ministers from OPEC+ called the Joint Ministerial Monitoring Committee is scheduled to meet on Oct. 2 to review the market and is not expected to make any changes to policy.

Russian Deputy Prime Minister Alexander Novak told Reuters on Thursday that there were no changes to OPEC+ plans to start phasing out oil production cuts from December.

OPEC+, which groups OPEC members and allies such as Russia, is scheduled to raise output by 180,000 barrels per day in December. Iraq and Kazakhstan have pledged to cut 123,000 bpd in September to compensate for earlier pumping above agreed levels.

OPEC+ sources told Reuters on Thursday that the producer group is set to go ahead with a December oil output increase because its impact will be small should a plan for some members to make larger cuts to compensate for overproduction be delivered in September and later months.

Speaking at the Russian Energy Week, Putin said on Thursday, “Russia is fulfilling its obligations to supply energy resources to the global market. It plays a stabilizing role in it, participating in such authoritative formats as OPEC+, and the GECF.”

He added: “And we will certainly continue this cooperation with our partners.”

Putin praised cooperation with the BRICS group of countries, which Moscow sees as a counterbalance to the West, adding that Russia will continue cooperation with the OPEC+ oil producers.

Putin also acknowledged difficulties in payments for Russian energy exports, for which “friendly” counries, which have not introduced sanctions against Russia, account for 90%.

Russian oil and gas sales account for around a third of total state budget revenues and have been crucial for underpinning country's economy, which faces multiple sanctions from the West over the military conflict with Ukraine.

Meanwhile, Russian Deputy Prime Minister Alexander Novak told reporters on the sidelines of Russian Energy Week that all countries participating in the OPEC+ deal are currently in full compliance with their respective obligations, Russian, according to the Interfax news agency.

He said Russia aims to be producing 540 million tons of oil per year by 2050 in the baseline scenario, but this amount might be adjusted depending on the country's obligations within OPEC+.

“Indeed, 540 million tons is the baseline scenario for which we're aiming [for oil output by 2050], but with a caveat taking into account cooperation with our partners in OPEC+. We have no objective to flood the market if it does not require this. But [it also works] the other way, to give the market additional resources if this is required,” Russian Deputy Energy Minister Pavel Sorokin said.

He said Russia is not worried about potential growth of demand in the period to 2030 or the period to 2050.

“In our view, it's fairly substantial. It's at least 5 million-7 million bpd, meaning about 4.5%-5.5% from current consumption to 2030. Subsequently, we're talking about around 5% additional growth to 2050,” Sorokin said.



Oil Edges Higher on Supply Concerns While Market Seeks Peace Talks Clarity

Oil Edges Higher on Supply Concerns While Market Seeks Peace Talks Clarity
TT
20

Oil Edges Higher on Supply Concerns While Market Seeks Peace Talks Clarity

Oil Edges Higher on Supply Concerns While Market Seeks Peace Talks Clarity

Oil prices edged up on Wednesday, buoyed by concern over oil supply disruptions in Russia and the US while the market awaits clarity on sanctions as the US attempts to broker a deal to end the war in Ukraine.

Brent crude futures were up 64 cents, or 0.8%, at $76.48 a barrel by 1339 GMT, on track for a third day of gains.

US West Texas Intermediate crude futures for March rose 75 cents, or 1%, to $72.60, up 2.6% from the previous close before Monday's US public holiday.

The March contract expires on Thursday and the more active April contract gained 70 cents, or 1%, to $72.53.

"The market is trying to make up its mind on three bullish drivers: Russia, Iran and OPEC," said BNP Paribas commodities strategist Aldo Spanjer. "People are trying to figure out the impact of announced and actual sanctions."

Questions also remain over whether sanctions on Russia could be phased out after talks between the US and Russia in Riyadh, but it may be too early for that, Spanjer said, Reuters reported.

Meanwhile, drone attacks on Russian oil infrastructure are reducing supplies.

Russia said that Caspian Pipeline Consortium (CPC) oil flows, a major route for crude exports from Kazakhstan, were reduced by 30-40% on Tuesday after a Ukrainian drone attack on a pumping station. A 30% cut would equate to the loss of 380,000 barrels per day (bpd) of market supply, Reuters calculations show.

In the US, cold weather has threatened oil supply, with the North Dakota Pipeline Authority estimating that production in the state would be down by as much as 150,000 bpd.

"The psychologically important $70 level (for oil prices) appears to have held firm, aided by the Ukrainian drone attack on the Russian oil pumping station and fears that cold weather in the US may curtail supply," said IG market analyst Tony Sycamore.

"On top of that there is some speculation that OPEC+ may decide to delay its planned supply increase in April," he added, referring to the Organization of the Petroleum Exporting Countries and allies. BNP's Spanjer expects the cartel to extend its output cuts.

However likely or not a US-brokered peace deal between Russia and Ukraine may be, analysts at Goldman Sachs said that any associated easing in sanctions against Russia is unlikely to bring a significant increase in oil flows.

"We believe that Russian crude oil production is constrained by its OPEC+ 9 million barrels per day production target rather than current sanctions, which are affecting the destination but not the volume of oil exports," they said in a report.

Israel and Hamas will also begin indirect negotiations on a second stage of the Gaza ceasefire deal, officials said on Tuesday. A ceasefire could lead to easing oil prices as the risk of conflict-driven supply disruption reduces.

Various tariffs being announced by the Trump administration could also weigh on oil prices by raising the cost of consumer goods, weakening the global economy and reducing demand for fuel. Trump said on Tuesday that he intended to impose auto tariffs "in the neighbourhood of 25%" and similar duties on semiconductors and pharmaceutical imports.