The head of Russia’s sovereign wealth fund, Kirill Dmitriev, has suggested that the Eurasian nation could reconcile its differences with Saudi Arabia and help stabilise the price of oil if a wider array of countries joins a new OPEC+ deal.
Russia was an ally of the Organisation of the Petroleum Exporting Countries for almost four years. However, when demand for the commodity plunged as a result of comprehensive Covid-19 lockdowns in China, the alliance fell apart. After Russia refused to bolster the commodity’s value through further output cuts, Saudi Arabia flooded the market and triggered the largest oil price drop in 29 years.
Speaking to Reuters, Dmitriev stated: “Joint actions by countries are needed to restore the(global) economy... They (joint actions) are also possible in OPEC+ deal’s framework.”
He added: “We are in contact with Saudi Arabia and a number of other countries. Based on these contacts we see that if the number of OPEC+ members will increase and other countries will join there is a possibility of a joint agreement to balance oil markets.”
Speculation has grown in recent weeks as to whether the United States will seek to capitalise on the rift between the world’s two largest petroleum exporting nations and instead develop its own agreement with its already close ally Saudi Arabia.
News that Washington is sending a special energy envoy to Riyadh has strengthened such claims, while others have argued that, with its shale industry devastated by the recent price plunge, the US is simply trying to stabilise the oil market as quickly as possible.
Speaking to reporters last week, President Donald Trump stated: “We are trying to find some kind of a medium ground,” and observed: “It’s very devastating to Russia because when you look at it, their whole economy is based on that and we have the lowest oil prices in decades so it’s very devastating to Russia. I would say it is very bad for Saudi Arabia but they’re in a fight, they’re in a fight on price, they’re in a fight on output. At the appropriate time I’ll get involved.”
When asked about potential US efforts to resolve the ongoing dispute, Dmitriev stated: “Efforts to restore relations between Russia and the United States are now as important as ever. We will take all the efforts [on] our side and hope the United States will also understand that this is necessary.”
By mid-afternoon Friday trading, Brent and West Texas Intermediate crude oil futures stand down 3.72 and 3.58 per cent respectively, at $25.36 and $21.79 per barrel.