Placeholder Image

Subtitles section Play video

  • Will Opec and Russia join forces to cut oil production?

  • The market is buzzing with talk that Opec and Russia could strike a deal

  • to pull barrels from a heavily oversupplied oil market.

  • Comments this week from Russia's energy minister

  • that he's ready to meet with Opec countries to discuss the production card

  • has triggered a large move in oil prices which have now risen more than 20% since last Wednesday.

  • How willing are Opec members to make a move?

  • Well, Opec's kingpin and de facto leader Saudi Arabia has a very clear stance on this.

  • It will cut production, but only if it's joined by other members of the cartel,

  • and other big producers such as Russia.

  • So will Russia cut production?

  • Well, the most important figure in the country's oil industry is Igor Sechin.

  • The chief executive of Rosneft, and a close confidant of President Putin.

  • In the past, he shot down speculation of coordinated cuts time and again.

  • First, he says Russian energy companies have to answer to shareholders

  • and cannot simply cut production just because they're ordered to by the Kremlin.

  • Second, he says the harsh winters in Russia make it very difficult to shut in production.

  • Now, it's worth noting that Mr. Sechin was absent from all of this week's meetings

  • between big Russian energy companies and the government.

  • Could there be other motives at play here?

  • Now, it could be that this week's statements in the talks between the Russian oil companies and the government

  • are nothing more than attempting to jawbone the market and prevent another collapse in the oil prices.

  • At a time when Iran is supposed to come back from sanctions and put more oil into the market

  • and there are many refineries closed for maintenance period.

  • What's the market impact?

  • The pay inflicted by lower prices that now have fallen more than 70% since the middle of 2014 is extreme.

  • In Russia, the Ruble has slumped to a record low

  • and government is scrambling to plug a huge hole in its budget deficit.

  • Even Saudi Arabia is suffering, its currency is under pressure

  • and it too has a budget deficit that is blown out to a record hundred billion.

  • So, perhaps the pain of lower oil prices will be enough to focus minds

  • and get a deal over the table.

Will Opec and Russia join forces to cut oil production?

Subtitles and vocabulary

Click the word to look it up Click the word to find further inforamtion about it

B1 FinancialTimes russia oil production market cut

Russia floats idea of oil output cut | FT Markets

  • 26 1
    Kristi Yang posted on 2016/02/01
Video vocabulary