Oil markets on ALERT: ‘World’s energy Tsar’ Putin leaves global prices on a knife edge
VLADIMIR Putin could send oil markets into a spin by pulling out of the planned extension to the current OPEC-led production cut.
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Global prices have been kept steady by the deal but concerns are rising this will be thrown into chaos by the Russian president.
Ministers from the Organisation of the Petroleum Exporting Countries will meet in Vienna Thursday to decide on the extension to the current agreement beyond the current end date of March 2018.
OPEC and its allies cut production by 1.8 million barrels per day in January and have agreed to hold down output until March.
However, there remains uncertainty over Russia’s appetite to join in extending output cuts.
Russia's position has not been clear.
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The Russians being quiet about their intentions about the OPEC deal is a little unsettling
Oil prices have surged in recent months due to output cuts by the OPEC producers and Russia.
Mr Putin is concerned a price recovery above $60 a barrel could unleash a wave of rival supplies.
Despite being the loudest voice calling for the original set of cuts, Mr Putin is under pressure at home not to back the extension with a number of Russia's largest oil companies reportedly not happy.
John Kilduff, partner at Again Capital LLC in New York says: “It’s the OPEC parlour game that we’re all playing.
“The Russians being quiet about their intentions about the OPEC deal is a little unsettling.”
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Harry Tchilinguirian, head of oil strategy at French bank BNP Paribas, says there remains “plenty of room for disappointment”
He said: “Should the outcome of the next OPEC meeting fall short of expectations, the large net-long speculative position on oil futures can unwind, sending prices lower and volatility higher.”
Bloomberg reported last week, since engineering Russia’s pact with OPEC to curb supplies a year ago, Mr Putin has emerged as the group’s most influential player.
One senior OPEC official told Bloomberg on condition of anonymity Mr Putin is now “calling all the shots.”
The Kremlin has found a way to assert its influence over global policy by making Mr Putin "the world’s energy Tsar”, according to Helima Croft, a former Central Intelligence Agency analyst.
Other experts say Mr Putin's growing sway within the oil cartel reflects a foreign policy which is designed to counter US influence across the globe.
