Russia has earned nearly $120 billion in additional revenue thanks to the production-cut pact signed between the members of the Organization of the Petroleum Exporting Countries (OPEC) and allied oil producers.
At large, low prices for oil are creating extra challenges for the country’s budget and for the entire economy, said Russian Energy Minister Aleksander Novak, adding that a sharp drop of oil prices may have an impact on the national currency and inflation rate.
“Over the two years of the OPEC+ agreement in force, Russia has received at least $120 billion of additional revenue, according to estimates. That’s why it is important to assess the effectiveness of cooperation with OPEC countries for the economy of the country,” Novak said in an interview with Russian business daily Kommersant.
A stable market in the first half of next year can be guaranteed by cutting oil output, according to the minister, who doesn’t rule out an extention of the current agreement between the oil cartel and its allies.
“I cannot predict the OPEC-non-OPEC deal’s validity period, we should follow the current conditions of the oil market. But it is important to understand that the cooperation will be continued in one form or another, as the previous agreement has proved its effectiveness,” Novak said.
The deal between OPEC’s 15 member states and allied nations led by Russia was clinched at a meeting in Vienna in early December. Under the agreement, global crude oil output will be slashed by 1.2 million barrels per day (bpd) for the first six months of 2019. The latest deal came as an extension of the pact signed at the end of 2016, which was aimed at trimming around a million barrels per day after the sharp decline in oil prices seen in 2014.