Publication: New Europe

Oil prices slipped on February 25 after sharp rises early in the session as traders were concerned that sanctions against Moscow following Russia’s invasion of Ukraine would disrupt global oil supply.

The Organization of Petroleum Exporting Countries (OPEC) and its allies led by Russia, a group known as OPEC+, said on February 2 the ministers agreed to raise their countries’ collective production by another 400,000 barrels a day in March.

“There is a very wise old saying that ‘it is a very foolish person that seeks to interfere in family disputes,’” Chris Weafer, co-founder of Macro-Advisory in Moscow told New Europe on July 9, asked Russia can mediate to help strike a deal between Saudi Arabia and the United Arab Emirates to raise output. Essentially this is a dispute between two Arab nations who are members of the Gulf Cooperation Council (GCC) and who share a lot of common interests, he added.

After seven years of sanctions and accusations of malign activities by both sides, political relations between Russia and the United States are the worst since the mid-80s and the trend could continue to worsen. The momentum has been in that direction for some time. But is there is a chance that the political engagement initiated by President Joe Biden may now stabilize the relationship and allow for the building of a better platform from which to move forward in the future?

The sanctions announced last week were milder than had been expected, with the exception of the ban on US investors buying Russian state issued ruble debt after June 15, Chris Weafer, co-founder of Macro Advisory in Moscow, told New Europe in an interview on April 19.

The Organization of Petroleum Exporting Countries (OPEC) and its allies, a group known as OPEC+, convened for talks chaired by Saudi Energy Minister Abdulaziz bin Salman and Russian Deputy Prime Minister Alexander Novak via videoconference on April 1, approving the adjustment of the production levels for May, June and July, while agreeing to continue to hold monthly meetings to assess market conditions and decide on production level adjustments for the following month, with every adjustment being no more than 0.5 million barrels per day, OPEC said in a statement.

Gazprom’s TurkStream natural gas pipeline to Turkey and Southeast Europe has drawn less opposition, certainly compared with the controversial Nord Stream 2 from Russia to Germany, although its goal has been the same – to allow Russian gas to reach European markets without transiting Ukraine.

Oil prices spiked on 3 January on news that Qassem Suleimani, commander of Iran’s elite Quds Force and architect of its growing military influence in the region, was killed at Baghdad’s airport during a drone airstrike authorised by US President Donald J. Trump, a move that has heightened geopolitical tensions. Traders fear a retaliation from Iran could disrupt world access to oil supplies.