Russian President Vladimir Putin stated on Wednesday at an investment forum that the current oil prices are ‘absolutely fine’ for his country. He also thanked Crown Prince Mohammed bin Salman of Saudi Arabia for the OPEC-Russia alliance in controlling the oil market. Putin said that the OPEC+ agreement on output cuts is successful and the Crown Prince is to praise for the achievement, as he was the initiator of the work. He added that Russia is willing to cooperate further with OPEC for stabilizing the market if there is a major drop. The statement is significant as Russia has not been very keen about making any commitment about further supply cuts. Along with Saudi Arabia, Russia is one of the largest oil producers in the world.
Putin added that Russia is comfortable with the current level of the oil price at $60 per barrel, as the country’s budget is balanced at $40 per barrel for the current year. For the coming year, the budget balance price will be $43 a barrel. The statement is to be viewed in the light of the OPEC+ meeting in Vienna that is to take place after a week. Also, there is the G-20 summit coming up this weekend in Buenos Aires, at which Putin is expected to meet Donald Trump as well as Crown Prince Mohammed bin Salman. So, in the coming weekends, Putin will be discussing matters like oil price and limiting oil production with the leader of the OPEC nations.
The Saudi Crown Prince is not comfortable with the present trend in oil pricing. On the one hand, he wants the price to go up, and on the other, he doesn’t want to displease Donald Trump who is for a lower oil price. This is especially so after the help he received from Trump in the aftermath of the Khashoggi incident. He will not be taking an open stand against the interests of Trump. In this context, the change in Putin’s position regarding limiting production is significant. Previously he was very cautious about commenting on limiting oil production. Now he implies that he wants to continue the ties with OPEC, and will stand with them when they decide to control production.