Reuters
Yuri Barsukov wrote, in “Kommersant”, about the reflection of OPEC + decision not to increase production on oil prices and the possibility of US shale oil returning to recovery, so where is Russia’s interest?
The article stated: It seems that the decision of the “OPEC +” countries not to increase oil production, which pushed prices to $ 70 a barrel, repeats old mistakes. Even before the cartel’s meeting on March 5, oil prices have steadily exceeded $ 60 a barrel, a level believed to make most of the US shale oil production profitable. Despite this, OPEC countries, led by Saudi Arabia, unexpectedly refused to observers to increase production.
Now, OPEC + countries are laying the groundwork for another drop in prices.
Over the past six years, prices twice exceeded $ 70 a barrel, and in both cases fell to $ 60 within six months under pressure from increased supplies from non-OPEC + countries. Riyadh may think that shale oil companies in the United States, after the shock of 2020, cannot allow themselves to intensify drilling operations. This view is popular with analysts of the largest investment banks: For example, Goldman Sachs raised its estimate of the average price of Brent in the second and third quarters of this year to 75 and 80 dollars a barrel, respectively. But I still remember well how these expectations were common after the drop in oil prices in 2015, which did not prevent the shale oil industry in the United States from increasing production by 3 million barrels per day in 2017-2019.
Russia, in light of such a Saudi policy, is in an ambiguous situation. On the one hand, Russia, unlike the other major participants in the OPEC + deal, was allowed to increase its production in April. It is profitable, as the budget and the oil companies will gain from higher prices and higher volumes; On the other hand, it could have perfectly suited both the company and the budget, with prices ranging from $ 50 to $ 60 a barrel.
Thus, Russia has the greatest interest in long-term market stability, which is now undermined by OPEC + actions.
The article expresses only the opinion of the newspaper or writer
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