Russia pockets $120 billion from oil deal
The deal between Russia and OPEC has made Moscow pocket 120 billion USD over the past 2 years.
In an effort to boost confidence in the oil market, Russian Energy Minister Aleksander Novak mentioned the production cut agreement that Russia and the Organization of the Petroleum Exporting Countries (OPEC) reached recently.
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Russian Energy Minister Aleksander Novak |
Accordingly, Mr. Aleksander Novak said that over the past two years, it is estimated that Russia has earned nearly 120 billion USD in additional revenue thanks to increased oil prices following production cut agreements between OPEC and producers outside the organization.
"It is estimated that after two years of the OPEC + agreement being in force, Russia has received at least $ 120 billion in additional revenue, according to estimates. That is why it is necessary to assess the effectiveness of cooperation with OPEC countries for the country's economy," Novak said in the Russian newspaper Kommersant.
Currently, oil prices have plummeted to nearly $40/barrel despite the OPEC + production reduction efforts, however, time has proven how effective this agreement is and Mr. Novak expressed confidence that what OPEC + achieved in early December will once again save oil prices for the first half of 2019.
"I cannot predict the duration of the OPEC- and non-OPEC agreement. We should follow the current conditions of the oil market. But it is important to understand that cooperation will continue in one form or another, as the previous agreement has proven its effectiveness," Novak added.
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Earlier, Mr. Novak answered on the Rossiya-24 TV channel on December 25 and affirmed that in the context of the rapid decline of oil prices by more than 30% in the fourth quarter of 2018, Russia has no plans to hold an extraordinary meeting with OPEC to find a solution to rebalance the market. Minister Novak added that the sharp decline in oil prices in recent weeks was due to the influence of macroeconomic factors.
According to Mr. Novak, the energy market is under pressure from fundamental factors, including the decline in oil demand in winter, the slowing global economic growth at the end of the year and the decline in world stock markets.
Under the production cut deal, Russia has pledged to reduce production by 228,000 barrels per day from a record monthly average of 11.41 million barrels per day.
Minister Novak affirmed that Russia will implement this production cut in the first quarter of 2019 because the amount of oil exploited has exceeded the record level of 11.42 million barrels this month.