Russian Energy Minister Alexander Novak will meet OPEC officials on Tuesday in Vienna, his spokeswoman said, as oil’s price fall piled pressure on Moscow’s budget.
The annual meeting had been planned long before oil fell below the $100 per barrel level critical for Russia’s oil sales which account for 40 percent of state budget revenues.
Russia suffered from a decline of oil production and prices this year and has cut its outlook for oil output as core western Siberian fields become more depleted.
The spokeswoman said that Novak and the officials from the Organization of the Petroleum Exporting Countries had not planned to discuss the prices of oil, which hit 26-month low for Brent crude on Monday.
However, a government source said the measures to prop up the prices have long been discussed at the ministry.
“The talk of closer cooperation with OPEC on prices have long been there,” he said.
So far, Russia, the world’s top producer of conventional oil, has ruled out coordinated action with OPEC to halt the price decline.
Yeah. Novak is scurrying to Vienna, but he’s not going to talk prices. Sure. Tell me another one, but not so funny as I just busted a gut reading that and can’t take too much more.
Putin, Inc. is no doubt in a mild-to-moderate panic at present because Brent has breached $100, and Urals is below that, in the low $90s. Russia needs Urals in the $104 range to meet budget targets, and that’s not counting Crimea or especially a war that doesn’t officially exist but which costs real money to fight.So off Novak runs to Vienna, in an attempt to get OPEC to prop up the price. Not that Russia will do anything to help, mind you. It’s MO has long been to demand, beg, cajole OPEC to cut output to support prices, while Russia produces to capacity. That’s what Russia did in 2009 when prices cratered into the $30s. OPEC was not amused then, and they won’t be amused now.
If anything, geopolitical considerations, namely Russia’s support of Assad and cooperation with Iran, will make the Saudis in particular even less generously inclined towards Russia.
Meaning that Novak’s mission to Vienna will accomplish nothing, except to provide an entertaining example of Russian all take, no give negotiating style.
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