![]() Russian Foreign Minister Sergey Lavrov’s visit to Riyadh in early June resulted in similarly supportive statements. As early as March 8th, three weeks into the invasion of Ukraine, OPEC reaffirmed its support for the oil deal with Russia. The sanctions and self-sanctioning measures that have followed the Ukraine war are putting a strain on Russia’s strategic role in OPEC+ and testing its future relevance for the alliance. This allowed Moscow on more than one occasion to breach its production quota by pumping crude above its allowance of 10.663 mn b/d in June 2022 (up from 9.457 mn b/d a year earlier), in addition to a special carve-out for its gas condensate. Thanks to its conservative monetary policies and a fiscal rule that mandated the funneling of excess revenue from oil sales into a sovereign wealth fund, Russia has been able to tolerate much lower oil prices than most of its OPEC+ peers. ![]() ![]() Unlike its Middle Eastern rivals-turned-allies, pre-war Russia has consistently enjoyed budget surpluses despite significant oil price fluctuations. Since it managed to seal an output reduction deal with Saudi Arabia at the end of 2016, Russia has been instrumental in co-regulating oil supply within the OPEC+ alliance, de facto sharing only as much power as it wanted with OPEC’s linchpins, Saudi Arabia and the UAE. In a previous HC Insider podcast in May 2022, Voloshin had already given a gloomy outlook for global economies and the commodities sector as a result of this year’s geopolitical events. In the second installment of this two-part article, George Voloshin, a corporate intelligence and sanctions expert, analyzes the way Russia has been hit by the effects of the war in Ukraine and the shifts this is triggering in its relations with Europe and Asia.
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