Putin's Reward for Doing a Deal With OPEC Overshadowed by Risks
- Reducing flow of Russian crude could damage fields, pipelines
- Russia, Saudi Arabia, Qatar, Venezuela agree oil-output freeze
Can U.S. Oil Capitalize on Russia, Saudi Output Freeze?
Neither a recession nor a collapse in revenue has been enough to convince Russian President Vladimir Putin that it’s time to join with OPEC and cut oil output to boost prices. His reasons may be pragmatic rather than political.
Russia’s Energy Minister Alexander Novak and his Saudi Arabian, Venezuelan and Qatari counterparts came to a preliminary agreement on Tuesday to freeze output at January levels. The world’s second-largest crude producer faces numerous obstacles to any deal that would actually cut production, even if Putin decides it’s in the national interest. Reducing the flow of crude might damage Russia’s fields and pipelines, require expensive new storage tanks or simply take too long.