28 December 2018, Moscow — One of OPEC’s partners, Russia, has slammed the United States for being one of the reasons for current global oil price volatility.
Russian Energy Minister Alexander Novak said on Thursday, that rising protectionism and trade wars and the unpredictability of the U.S. administration, are the reasons for oil price instability over the past two years, a report by Reuters said.
Oil prices remain relatively low even after the Organisation of the Petroleum Exporting Countries, OPEC and its non-OPEC partners, Russia inclusive, cut oil production by 1.2 million barrels per month at a meeting in Vienna earlier this month.
International benchmark, Brent sold at $53.89p/b on Thursday, while OPEC’s daily basket price was at $53.92p/b, and the U.S West Texas Intermediate, WTI sold for $45.16p/b.
Oil prices have been volatile, falling by more than a third this quarter.
“All these uncertainties, which are now on the market: how China will behave, how India will behave… trade wars and unpredictability on the part of the U.S. administration… those are defining factors for price volatility,” Novak said.
The U.S President, Donald Trump, had bitterly called out OPEC and its partners to increase market quantity to bring down prices, even went to the extent of threatening with the NOPEC Act which allows the group to be sued.
However, the group maintained too much supply would hurt its members’ economic growth which mostly rests on revenue from crude oil exports.
Between January 2017 and this year, OPEC and its non-OPEC members have four times, cut production and supplies to boost prices.
Russia’s Novak also told reporters that the U.S. decision to allow some countries to trade Iranian oil after putting Tehran under sanctions was one of the key factors behind this month’s global pact to cut oil output by 1.2mb/d.
“Had it been hard sanctions against Iran, we wouldn’t have done it (reduce output),” Novak told reporters.
He also said that Russia would cut its output by between 3 and 5 million tonnes in the first half of 2019 as part of the deal and then it would be able to restore it to 556 million tonnes (11.12 million barrels per day) for the whole 2019, on par with 2018.