"How Russia views OPEC"

From al-Monitor:

During the recent trip of Russian Foreign Minister Sergey Lavrov to Saudi Arabia, issues of settling the Gulf crisis with Qatar and enlisting Saudi support to form a united Syrian opposition dominated the agenda of Russia’s top diplomat’s meetings with Saudi King Salman bin Abdul-Aziz Al Saud and Foreign Minister Adel al-Jubeir. However, there was one issue discussed at the talks that did not receive much media attention, yet whose significance for Russia as an oil-producing nation is hard to underestimate — oil.

In August, The Wall Street Journal reported on the readiness of Russia and Saudi Arabia to push for the extension of the so-called "OPEC plus" agreement beyond March 2018. This treaty involves OPEC and non-OPEC members that, in 2016, agreed to decrease their oil production in order to encourage the growth of oil prices in the international market. However, at least for the Kremlin, the proclaimed intention to support the continuation of the deal implementation beyond the initially set deadline should not be considered as the final decision of the Russian leadership. In July, the participants of the ministerial meeting of members of OPEC and non-OPEC nations in St. Petersburg touched upon the issue of the deal’s extension. Russian Energy Minister Alexander Novak avoided answering direct questions on whether the agreement would be extended beyond March 2018. And there are certain reasons for this.

Indeed, the Kremlin’s attitude toward the deal might change. For now, Moscow believes that keeping the implementation period of the agreement until March 2018 is optimal and its main task is to ensure that the deal stays in force until that day. Nevertheless, if Moscow decides to extend its participation in the deal beyond March 2018, supporters of this move in the Russian government will definitely have problems with getting the unanimous approval of the business sector. First of all, there is a certain disillusionment among Russian businesses regarding the effect of the deal on oil prices. The implementation of the deal managed to stabilize the price of oil, but its level still remains lower than initially expected. Russian oil and gas companies should also be concerned that the extension of the deal might negatively affect their plans to launch new projects aimed at increasing domestic oil output in 2019-2025. Apart from this, experts believe that the deal created additional opportunities for Russian rivals in the energy market that decided not to join the agreement.

However, the negative economic factors that might compel Moscow to quit the agreement are counterbalanced by a number of political factors that unexpectedly strengthen the Russian motivation to stay as a part of the deal until, at least, March 2018. First of all, Russia is preparing for the presidential elections that are supposed to take place in March 2018. The Kremlin is interested in high oil prices that would allow the accumulation of enough funds to conduct Putin’s election campaign and ensure the Kremlin’s financial capacities to ensure his victory. In May, this necessity to accumulate such money was probably one of the reasons for Moscow to propose the extension of the deal for nine months instead of the initially planned six months. By doing this, Russia ensured that the deal could impact oil prices until the elections.

Moscow also needs money to buy the loyalty of the population when it comes to the presidential race....

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