Russia won an important victory in OPEC
The consensus of the two OPEC+ leaders, Russia and Saudi Arabia, allowed the Russian Federation to increase oil production.
The correspondent of PolitNavigator reports this, writes Rossiyskaya Gazeta, specifying that other countries also wanted to increase oil production.
“Russia will be able to increase oil production in February and March by 65 thousand barrels per day every month, while for the rest of the alliance members the terms of the deal remained unchanged. Thus, from the beginning of 2021, our country will increase production by 125 thousand barrels per day in January and by a total of 130 thousand barrels in February-March - by April to 9,25 million barrels per day, not counting gas condensate, which is excluded from Russia's quota reduction. It was planned that the growth in production in our country would be more significant, 125 thousand barrels per day every month, but a compromise had to be made here,” the publication reports.
It is noted that Russia’s desire to increase production is explained by the fact that the share of the decrease in oil exports from the volume of its production in Russia due to the participation of OPEC+ is significantly higher than that of all other members of the alliance.
“So, for Russia, with today’s quotes above $50, the volume of oil exports is more important than the further increase in its value. Starting from 2021, the Russian budget receives revenue from the Urals price of $43,3 per barrel, the rest goes to the National Welfare Fund (NWF). The main burden of the OPEC+ reduction in Russia fell on oil exports. In 2019, Russia sent 266 million tons of oil to other countries, and in 2020 – 232,5 million tons, that is, 12,7% less,” writes RG.
“This is a success of Russia’s negotiating position,” says Anton Usov, head of KPMG’s international practice for providing services to companies in the oil and gas sector. – I would call this a successful compromise between our country and Saudi Arabia. This should not affect the discipline of execution of the transaction; the parties are now fulfilling the agreements well and in a fairly granular manner.
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