Russia believes that Moscow, its OPEC+ ally Saudi Arabia, and the United States could work together to stabilize the oil market if necessary, the head of Russia’s sovereign wealth fund told Reuters on Thursday.
“There was an example when (Russian) President Putin, (U.S.) President Trump and (Saudi) Crown Prince Mohammed bin Salman played a key role in stabilising markets,” Dmitriev, chief executive of the Russian Direct Investment Fund, told Reuters on the sidelines of an economic event in Russia.
“It is early to talk about concrete joint action yet but based on an earlier precedent, such action is possible,” Dmitriev added.
Back in 2020, when the beginning of the Covid pandemic crashed oil demand and oil prices, President Trump – then in his first term in office – convinced Saudi Arabia and Russia and the entire OPEC+ group to slash production amid collapsing demand and stabilize oil prices. In the spring of 2020, oil prices plummeted, with even going into negative territory for the first time ever, as lockdowns in many countries caused a major decline in global oil demand.
Five years later, oil markets are being roiled again this spring. First crude prices crashed in early April after President Trump announced sweeping “retaliatory tariffs” on the world, creating concerns about the global economy, and after OPEC+ announced it would hike production in the coming months by more than previously expected in the plan to unwind the ongoing output cuts.
Last week, the bombshell on the market was dropped by Israel, which launched coordinated attacks on Iran’s nuclear enrichment sites and military leadership. Iran is retaliating with missiles at Israel, and the world and oil market fear an escalation that could hit and/or disrupt crude oil exports from the Middle East.
“Events in the Middle East create conditions for oil price rises. The dynamics of these events will define how dramatic this rise will be,” Dmitriev told Reuters today.