[LINK] "Why Vladimir Putin Won't Be Helping OPEC to Cut Oil Production"

[rfmcdonald]

Elena Mazneva and Dina Khrennikova write for Bloomberg about the apparent relative lack of dependency of Russia on high oil prices, at least compared to some OPEC governments.

“Russia and OPEC have talked about cooperation in cutting production many times in the past, but the results of that were always dismal and disappointing,” said Nordine Ait-Laoussine, president of Geneva-based consultant Nalcosa and former energy minister of Algeria. “Russia has assumed that when oil prices go down, OPEC countries are in a weaker position and are more likely to be the first to cut its production, and they always did.”

[. . .] Russia has good reason to want crude to rise again. Energy accounts for more than 60 percent of exports and the nation’s economy is entering a recession due in large part to the price slump. Oil and gas are contributing the lowest share of budget revenue since 2009, according to data from Russia’s treasury.

However, the nation can tolerate low prices better than many OPEC members. Russia’s budget deficit is projected to be about 3 percent of economic output this year, according to Finance Minister Anton Siluanov. Saudi Arabia, OPEC’s largest producer, will have a budget gap of almost 20 percent, the International Monetary Fund forecasts.