Kremlin Says OPEC+ Cuts Will Kick in Later, Confirms Putin to Visit Gulf

December 05, 2023, 10.41 PM  | Reporter: Syamsul Ashar
Kremlin Says OPEC+ Cuts Will Kick in Later, Confirms Putin to Visit Gulf

ILUSTRASI. A 3D printed oil pump jack is seen in front of displayed stock graph and Opec logo in this illustration picture, April 14, 2020. REUTERS/Dado Ruvic/Illustration

VLADIMIR PUTIN - MOSCOW, Dec 5 (Reuters) - Oil production cuts agreed by the OPEC+ group will take time to kick in, the Kremlin said on Tuesday as it confirmed that President Vladimir Putin would visit the United Arab Emirates and Saudi Arabia on Wednesday.

Putin will also host Iranian President Ebrahim Raisi in Moscow the following day, Kremlin spokesman Dmitry Peskov said.

Russia cooperates with all three countries in the OPEC+ group of oil producers, which last week announced new voluntary supply cuts that were greeted with skepticism by the oil market because of doubts about whether they would be implemented fully.

Oil prices fell 2% last week after the OPEC+ announcement, but Brent crude futures were firmer on Tuesday.

"There are certain processes of inertia in the oil market; it is very big and heavy. Therefore, sometimes the effect is delayed. Therefore, coordination will continue," Peskov said.

Asked if Putin would discuss oil market cooperation on his Gulf trip, Peskov said: "These discussions are held within the OPEC+ format, but of course, cooperation in this area is always on the agenda."

Putin's foreign policy adviser Yury Ushakov said Saudi-Russian cooperation within OPEC+ was "fruitful".

"Fairly close Russian-Saudi coordination in this format is a reliable guarantee of maintaining a stable and predictable situation in the global oil market," Ushakov was quoted as saying by Russian news agencies.

The Kremlin later confirmed that Putin would hold talks with Saudi Arabia's Crown Prince Mohammed bin Salman, the kingdom's de facto ruler, on cooperation within OPEC+.

Putin and the crown prince have developed close ties and were instrumental in forging the 2016 deal that formed the OPEC+ group comprising the Organization of the Petroleum Exporting Countries (OPEC) and allies led by Russia.

SUPPLY CUTS

Putin's visit to the Gulf comes after OPEC+ agreed last Thursday to voluntary supply cuts totaling about 2.2 million barrels per day (bpd), including an extension of existing Saudi and Russian voluntary cuts of 1.3 million bpd.

Apart from energy issues, Putin is keen to cultivate the Gulf states as part of his drive to build global alliances with non-Western countries and demonstrate what he says is the failure of the United States and its allies to isolate Russia with sanctions over the conflict in Ukraine.

Ushakov said Russia's "special military operation" in Ukraine would also be discussed during Putin's trip.

Dubai, the UAE's largest city, is currently hosting the COP28 global climate summit. However, a Russian representative at the event told Reuters that Putin would be going to Abu Dhabi, not to Dubai, and would not take part in the summit.

Peskov said the agenda for Thursday's visit to Moscow by Iran's Raisi was likely to include regional issues including the war in Gaza.

Iran backs the militant Palestinian group Hamas, Israel's enemy. Russia has angered Israel by hosting a Hamas delegation in Moscow.

Editor: Syamsul Azhar
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