EMEA News
Russia Positive on Oil Deal Efforts, Signs Deal with UAE
While the integrity of the Organization of the Petroleum Exporting Countries (OPEC) has repeatedly been questioned along with the efficacy of its output reduction cuts, at least one country has benefited from its association and that of its members, as Russia demonstrated in two separate announcements on Friday.
Arguably the more significant of the announcements came when Russian president Vladimir Putin and Sheikh Mohammed bin Zayed, Abu Dhabi crown prince of the United Arab Emirates, signed a declaration on a strategic partnership that included an agreement to continue cooperation in the oil and gas realm.
The declaration stated that the cooperation is aimed at providing balance and stability on the global oil market and will also strengthen and develop political interaction on key bilateral, regional, and international issues such as law enforcement, piracy, and disarmament.
Putin called the UAE Russia's "reliable and long-standing partner" in the Middle East and said the declaration is "a good step towards even stronger bilateral ties"; the UAE prince added, "I think that our cooperation will expand, thanks in part to the signing of the declaration."
The busy Putin also told bin Zayed that OPEC's efforts to bring about a market rebalance has been good for oil prices: "Our joint efforts, including those of our friends in Saudi Arabia and in OPEC in general, have yielded good results for the stabilization of the hydrocarbon market."
While the announcements were little more than public relations opportunities for Russia and OPEC, David Blackman, an independent energy analyst, regards both entities as being in control of crude prices, the formidable influence of U.S. shale notwithstanding.
Writing in Forbes, Blackman noted that "unless and until OPEC/Russia react by putting more exports onto the market, the overall inertia behind crude prices continues to mitigate in favour of higher prices to come.
"The current situation is a testament to how effective the agreement between OPEC, Russia and several other non-OPEC exporting countries has been in influencing the recovery in crude prices over the last 17 months."
But the cutback agreement is not the only influence on prices: the merest suggestion of a policy change coming from either entity is enough to galvanize traders, as evidenced last month when Alexander Novak, energy minister for Russia, caused crude to drop dramatically merely by suggesting the time had come to "consider" easing the cuts.
