Russia may not benefit from the extension of the agreement with OPEC

Russia and Saudi Arabia agreed on a possible extension of the agreement to reduce oil production, but there is no guarantee that the decision for Russia will be beneficial, writes Benjamin Bidder in his article published by Swiss newspaper Neue Zuercher Zeitung. 21.May.17 1:38 PM By Christina Orlina Photo Toinnov.com    445

The Ministry of energy of two countries — Russia and Saudi Arabia — announced the extension of the agreement to reduce oil production. This deal was concluded late last year between the OPEC countries and another 11 countries (including Russia), outside the cartel. Now Moscow and al-Riyadh suggest keeping limits on oil production until the beginning of April 2018. Then the parties agreed that OPEC "will be removed" from the oil market 1.2 million barrels of oil per day. About 600 thousand, Russia and others joined the agreement state. Russia, in particular, has pledged to cut oil production by 300 thousand barrels, the obligations of the largest member of OPEC — Saudi Arabia — 500 thousand barrels per day. "The world market oil is traded in dollars, and in Russia, companies and the government conduct settlements in rubles. Consequently, will favor the budget the rise in oil prices, which are going to seek the restriction of quotas on oil production, depends mainly on the exchange rate, writes the author of the publication. — As the ruble, as a rule, closely linked to the price of oil, if the price will rise and oil prices and the ruble, both effects can offset each other."

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