Putin says oil production cuts needed to keep prices down

MOSCOW: Russian President Vladimir Putin said on Wednesday oil production cuts were needed to maintain a certain price level, contradicting assurances from other leaders of the OPEC+ producer group that he was not looking to manage the market in this way.
The United States and Europe have accused Russia of weaponizing energy to contain the West in its drive to weaken Moscow’s military campaign in Ukraine.
Moscow, in turn, accuses the West of weaponizing the dollar and financial systems such as the international payment mechanism SWIFT in retaliation for sending Russian troops to Ukraine in February 2022.
Speaking at a televised government meeting, Putin said the situation in the global oil market was, overall, “absolutely stable” as Russia maintains production cuts to support prices.
He also said that Russia had reduced its production, which was at the “required level”.
Putin added: “But all our actions, including those related to voluntary production cuts, are precisely linked to the need to maintain a certain price environment in world markets, in dialogue and in contact with our OPEC+ partners. “.
Organization of the Petroleum Exporting Countries (OPEC) kingpin Saudi Arabia and other OPEC members have repeatedly said they are not targeting a specific price for oil, which major fuel consumers like the United States have accused the group of illegally trying to do so.
At the same time, some OPEC watchers said the organization needed higher oil prices due to rising inflation.
Russia said on April 2 that it would extend an oil production cut of 500,000 barrels per day (bpd) – about 5% of its crude output – until the end of the year, compared to February levels. Major OPEC members announced cuts on the same day.
“We are reducing production, but it is nevertheless at the required level,” Putin said.
Russian Deputy Prime Minister Alexander Novak, during a visit to Iran, said later Wednesday that Russia had met its oil production cuts of 500,000 bpd this month.
Last week, oil price benchmarks fell for a fourth consecutive week, the longest streak of weekly declines since September 2022, on fears of a US recession and the risks of a historic default on public debt in early June. The price of Russia’s ruble-denominated flagship Urals oil blend fell 14% below the assumed breakeven level for this year’s federal budget in early May, Reuters calculations showed, already compounding a huge deficit in the state coffers.


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