Russia Reiterates Commitment to OPEC+ Amid UAE's Exit from Oil Production Pact

Russia Reaffirms Commitment to OPEC+ Amid UAE's Shock Exit

Russia has no plans to leave its alliance with the Organization of the Exporting Petroleum Countries (OPEC) following the United Arab Emirates' (UAE) decision to quit the cartel, despite concerns about the future of the partnership amid a historic supply disruption caused by the Iran war.

The Kremlin has stated that it hopes the UAE's exit from OPEC does not signal the end of the broader OPEC+ alliance, with Russia and Saudi Arabia serving as the de facto co-leaders of the group. The UAE's exit, effective May 1, marks the culmination of years of tension with Saudi Arabia over oil output policy and competition for regional political influence.

Russia's decision to remain in the OPEC+ alliance is driven by a lack of incentives to leave, as the country sees no viable options to raise oil production significantly in the near future. According to a person close to the government, Russia's energy infrastructure has been struggling due to Ukrainian attacks, limiting its ability to increase production.

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The UAE's departure from OPEC is a significant blow to the group's ability to manage oil prices by adjusting supply. Before the Iran war, the UAE was the third-biggest OPEC producer, trailing only Saudi Arabia and Iraq. Several delegates within the alliance have stated that they do not plan to follow the UAE out of OPEC, nor do they see its departure triggering a wider exodus.

Dmitry Peskov, the Kremlin Spokesman, emphasized the importance of the OPEC+ format in stabilizing energy markets and minimizing fluctuations. Kazakhstan has also reaffirmed its commitment to the alliance, stating that changing its participation format is not on the agenda. The comments from the Kremlin echo the sentiment of several officials at other OPEC+ members, who do not expect a wider exodus to follow the UAE's departure.

Russia's ability to ramp up production remains limited due to intensified attacks on its oil infrastructure, including refineries and sea terminals, as Ukraine aims to reduce the inflow of petrodollars to the nation's coffers. In March, Russia's crude-only output was virtually flat, with a production level of 9.167 million barrels a day, which is 407,000 barrels a day lower than what Russia was allowed to produce under an agreement with OPEC and its allies.

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