According to the Kremlin, Russian President Vladimir Putin is scheduled to make a rare visit to the Middle East on Wednesday. The visit will involve discussions on bilateral relations, oil, and international affairs in Saudi Arabia and the United Arab Emirates (UAE).
Dmitry Peskov, Putin’s spokesperson, stated during a press conference on Tuesday that this visit would be the first since the commencement of Russia’s war on Ukraine. Notably, Putin will visit both the UAE and Saudi Arabia on the same day.
When asked about the possibility of Putin discussing coordinated actions in the global oil markets during his visit, Peskov mentioned that such talks would take place within the framework of the OPEC+ group. He also emphasized that cooperation in this area is always on the agenda.
Yuri Ushakov, Putin’s foreign policy advisor, separately commented on the productive nature of Saudi-Russian cooperation within the OPEC+ framework.
According to Russian news agencies, Ushakov stated that the coordination between Russia and Saudi is so close that it ensures the stability of the global oil market. The Kremlin later confirmed that Putin would engage in discussions with Saudi Crown Prince Mohammed bin Salman regarding cooperation within the OPEC+ framework.
In an effort to tackle speculation and volatility, the OPEC+ alliance expressed readiness to increase oil production cuts in the first quarter (Q1) of 2024. On Thursday, OPEC+ reached an agreement on voluntary supply cuts of approximately 2.2 million barrels per day (bpd). This includes an extension of the current voluntary cuts of 1.3 million bpd by Saudi and Russia.
Need for further action
Novak expressed appreciation for the timely actions taken by OPEC+ to prevent an additional 2.2 million barrels per day from entering the market in Q1 of 2024. He emphasized that these measures would help mitigate the negative impact of falling demand during that period. Additionally, Novak highlighted the readiness of OPEC+ countries to take further action if the current measures prove insufficient in addressing speculation and volatility in the oil markets.
These remarks came in response to concerns raised in the oil markets regarding the full implementation of voluntary cuts.
According to a report from the Russia News Agency TASS, Russia is set to tighten restrictions on oil and fuel supplies in line with the OPEC+ agreement starting this month. The report stated that Russia aims to fulfill its commitments by voluntarily reducing oil and fuel supplies by 500 thousand bpd by January.
Challenges and complexities
Following the announcement from OPEC+, oil prices experienced a 2 percent decline last week. However, on Tuesday, Brent crude futures saw an increase.
Peskov acknowledged that there are challenges and complexities in the oil market, which can occasionally result in delays in achieving desired outcomes. He highlighted the need for continued coordination to address these issues effectively.
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