The Russians are at it again. They have invited Opec to a gathering in Moscow that the oil cartel has absolutely no interest in attending. There is good reason for that. While Opec has been cutting its production to boost oil prices – a painful and tricky policy that has largely been successful – Russia has been lowering tarrifs and urging its companies to pump all they can. That means Russia has taken over from Saudi Arabia as the largest oil producer, though the kingdom’s capacity of 12.5m b/d far outstrips that of its rival.
Sergei Shmatko, Russia’s energy minister, insists he promised Opec nothing.
Menawhile, Ali Naimi, Saudi Arabia’s oil minister, has taken Russia’s oil production in his stride, recently quipping: “All people are doing is depleting their resource base fast. Time takes care of all these things. We are happy and content.”
But in private Opec ministers are not so sanguine. What makes them really mad is not so much Russia’s oil output, but having to sit through endless speeches by Russian ministers about how the two should work together when everyone knows the bear free-rides on Opec’s efforts to maintain oil prices.