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Page added on September 30, 2008

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Russia may boost OPEC clout, raise oil risk premium

DUBAI (Reuters) – Closer cooperation between OPEC and Russia, which between them supply half the world’s oil, could see a bigger political risk premium priced into oil and add more muscle to the producer group’s output policy.


Russia’s desire for deeper cooperation with OPEC comes as its relations with the West have deteriorated over issues such as the conflict in Georgia. Moscow has already forged closer ties with OPEC price hawks and U.S. foes Venezuela and Iran.

The biggest potential effect on prices would come if Russia joined any move by the Organization of the Petroleum Exporting Countries to cut supplies, an unlikely step with oil trading near $100 a barrel.


But in comments raising the prospect of Russia actively managing supplies, Energy Minister Sergei Shmatko said on Thursday Moscow wanted to influence prices by publishing output forecasts and delaying the development of fields.


“It’s certainly not the sort of thing consumers want to hear coming out of a major producer,” said Julian Lee, analyst at the London-based Center for Global Energy Studies. “It will raise concern about the future of Russian production.”


Reuters



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