Will New OPEC+ Deal Maintain Balance in the Oil Market?

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  • A fresh OPEC+ deal is required to maintain a balance in the oil market. 
  • Prices go out of control as the agreement didn’t go well between the OPEC+ countries. 
  • Efforts to restore relations between Russia and the United States are important. 
  • The RDIF and its partners have produced 500,000 coronavirus test kits so far.
  • Dmitriev said that within a month, test kits for fast and mass public use would be ready. 

Kirill Dmitriev, head of Russia’s sovereign wealth fund said that a fresh  OPEC+ deal to balance oil markets would take place if other countries join together, reports Reuters.  He also put forth that countries should work jointly to overcome the economic crisis caused by coronavirus. 

A call for joint approach

A joint pact among the Organization of the Petroleum Exporting Countries and other producers, including Russia (known as OPEC+), to curb oil production to support prices fell apart earlier this month.  This has sent the global oil prices into a tailspin.

“Joint actions by countries are needed to restore the(global) economy… They (joint actions) are also possible in OPEC+ deal’s framework,” Dmitriev, told Reuters in a phone interview.

Kirill Dmitriev, head of the Russian Direct Investment Fund (RDIF) and the Energy Minister Alexander Novak were Russia’s top negotiators in the production cut deal with OPEC. The existing deal expired on March 31.

“We are in contact with Saudi Arabia and a number of other countries. Based on these contacts we see that if the number of OPEC+ members will increase and other countries will join there is a possibility of a joint agreement to balance oil markets.”

Who the new members are? 

  • Dmitriev declined to say who the new deal’s members should or could be. 
  • U.S. would involve in the oil price war between Saudi Arabia and Russia at the appropriate time.
  • Coronavirus has triggered the inevitable  global economic crisis. 
  • This has led to the global debt to the 323% from 230% at a time of the previous economic crisis of 2008.

“Efforts to restore relations between Russia and the United States are now as important as ever, we will take all the efforts our side and hope the United States will also understand that this is necessary,” he said.

Tackling the coronavirus challenge

  • The Russian Direct Investment Fund  and its partners have produced 500,000 coronavirus test kits so far. 
  • They are planning to increase production to 2.5 million kits a week.
  • President Vladimir Putin said on Thursday he hoped Russia would defeat coronavirus in 2-3 months. 
  • The total number of infected Russians, including some close to the country’s elite, topped 1,000, with four virus-related deaths.
  • At present, the fund and its partners  focus on producing tests for companies.
  • They plan to test workers at towns where their big plants are located, so-called single-industry or monotowns.

Dmitriev said that within a month, test kits for fast and mass public use would be ready, so people could order them at home via taxi and delivery service apps at tech companies Yandex (YNDX.O) and Mail.Ru (MAILRq.L). Only a third of all tests will be exported.

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Source: Reuters