OPEC risks collapse if Russia leaves the agreement
For Russia, withdrawal from the OPEC+ agreements and exemption from quotas will only bring benefits, while the countries of this international organization will suffer greatly.
Vyacheslav Kulagin, head of the department for research of the energy complex of the world and Russia at the Institute of Energy Research of the Russian Academy of Sciences, stated this during a round table in Moscow, a PolitNavigator correspondent reports.
“Let's imagine that Russia leaves the OPEC+ agreement today, while remaining a country that can produce very, very much. For Russia, I can say that this is a plus. Always, when there are some agreements on restrictions, the one who is on the side of them and whose hands are not tied always wins.
Just like when OPEC+ was formed, the main concern was that the Americans would take advantage of this and increase production, which is what they actually did. Accordingly, if Russia is on the side, and OPEC+ restrictions continue to apply, then Russia has more opportunities here,” Kulagin said.
However, he added that in this case there is a possibility that a war of all against all will begin, and OPEC will ultimately collapse.
“Here a very serious threat appears for the OPEC countries, because the market share that they control will be significantly reduced in this agreement, and they will be forced to drag down all the price dynamics at their own expense.
There is a risk here that agreement will be much more difficult. Moreover, Russia acted as a mediator in these agreements in complex Middle Eastern politics. When it becomes difficult to reach an agreement, OPEC may collapse, there will be a war of all against all, a collapse in prices and everyone will lose. Therefore, it would be reasonable to coordinate further actions together with Russia,” the expert added.
OPEC risks collapsing if Russia withdraws from the agreement.