Russia Monitor is a review of the most important events related to Russian internal and external security, as well as its foreign policies.
Date: 28 May 2023 Author: Grzegorz Kuczyński
Saudi-Russia Tensions Rise On OPEC Oil Cuts
Tensions are mounting between Saudi Arabia and Russia on OPEC oil production cuts. Riyadh has grown increasingly frustrated with the fact that recent oil cuts failed to boost prices. One of the reasons is Russia whose oil exports have grown despite declarations to curb output. Moscow also said it would oppose further cuts in production.
Riyadh has grown increasingly frustrated with Russia, which apparently has not kept its end of the deal and is not reducing oil production as pledged, sources told The Wall Street Journal. Saudi officials have complained to senior Russian officials and asked them to respect the agreed cuts. Riyadh believes Russia’s oil supply to international markets is growing, which makes global prices stagnate while Saudi Arabia seeks higher oil prices. The Kremlin pledged to cut crude production by 500,000 barrels a day in March and April and now maintain it through to December. Many believe that Russia is not following through on its commitment to cut output. The International Energy Agency (IEA) said that Russia may even be looking to boost output to compensate for lost revenues. At the key OPEC+ meeting on June 4, Saudi Arabia will seek to reach a deal prompting a rise in oil prices. Will OPEC members discuss new production baselines from which each state performs cuts? Russian Deputy Prime Minister Alexander Novak said he expected no new steps from the OPEC+ group of oil producers at its upcoming meeting. Moscow is okay with the current oil prices and production quotas. In mid-May, Russian President Vladimir Putin said that energy prices were approaching “economically justified” levels. After the previous OPEC+ meeting in early April, several major OPEC members, including Saudi Arabia and the United Arab Emirates, announced intentions to voluntarily cut a further combined 1 million barrels per day of production between May to December. The EU and the U.S. criticized cuts while the White House has accused Opec+ of aligning with Russia after Saudi Arabia led the group in agreeing deep oil production cuts and backing Moscow’s invasion of Ukraine shortly after OPEC+ announced oil production cuts.
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