Russia will remain in the OPEC+ group alongside the remaining OPEC members and doesn’t expect a price war following the abrupt exit of the United Arab Emirates, Russia’s Deputy Prime Minister Alexander Novak said on Thursday.
In a surprise announcement earlier this week, the United Arab Emirates (UAE) said it is quitting OPEC and the wider OPEC+ alliance effective May 1, to pursue its national interests.
For years, the UAE has been working to boost its crude oil production capacity to 5 million barrels per day (bpd) by 2027, and has frequently clashed with its fellow OPEC and OPEC+ producers over output quotas. The UAE has insisted that it should be allowed to actually use more of its growing spare production capacity.
Russia does not plan to quit OPEC+ as the alliance allows producers to manage risks on the oil markets during crises, said Novak, who is in charge of Russia’s oil policy and represents the country at OPEC+ meetings.
The OPEC+ cooperation alliance effectively mitigates risks during crises and allows for keeping investments in the industry; “therefore, we will continue to work together,” Novak added.
Russia and Saudi Arabia, the two biggest oil producers in OPEC+, have not discussed the UAE’s exit from the cartel and the wider alliance, Russian TASS news agency quoted Novak as saying today.
There won’t be any oil price war with the UAE’s exit amid the deepest supply crisis in the industry, the Russian official added.
“In the current situation, how can there be a price war amid a shortage on the global market?” Novak said.
“Huge volumes of oil are not reaching the market now. Demand significantly outstrips supply, due to the serious logistics hurdles with the situation in the Middle East,” the leading official of the Russian oil policy noted.
By Tsvetana Paraskova for Oilprice.com
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