Russia Steadfast on OPEC, European Energy Supply

Russia Steadfast on OPEC, European Energy SupplyRussia Steadfast on OPEC, European Energy Supply

Russia is committed to its OPEC pact with Saudi Arabia and will continue to supply Europe energy despite tensions with the West after US-led strikes on Syria, a Russian spokesman said.

Oil prices hit multiyear highs ahead of missile strikes by the US, the UK and France against Syria. Analysts feared a direct confrontation between the West and Moscow could spill over into energy markets. Russia is the largest supplier of gas and crude to Europe, Platts reported.

An escalation of regional conflicts, it's feared, could also strain Kremlin's pact with OPEC and key members such as Saudi Arabia, which are historically allied to the US and dependent on Washington for security guarantees.

However, a senior spokesman of Russian President Vladimir Putin has dismissed concerns that geopolitical tensions could influence Moscow's energy policies.

Relations with OPEC and Saudi Arabia are on "a different dimension" and have nothing to do with geopolitics, Dmitry Peskov said on Tuesday.

Under the production cut deal, which came into force in January 2017, OPEC and a Russia-led group of 10 major producers agreed to cut 1.8 million bpd of crude from the market. Their pact is effective through to the end of 2018, with a further permanent framework for market management currently under discussion.

"We are developing good relations in respect of energy markets, coordination with Saudi Arabia, other countries. We have maintained contacts over those issues and these contacts will continue," Peskov told Platts.

Russia is a key ally of the Assad government in Syria, which is accused by the US and some European powers of using chemical weapons against its own people.

The Joint Ministerial Monitoring Committee, co-chaired by Saudi Arabia and Russia, is to meet this Friday in Jeddah, Saudi Arabia, to discuss progress in rebalancing world oil markets and draining stockpiles. The ministers will also consider the future of their current deal, with some participants urging an extension into 2019.

Peskov also played down concerns over the security of Russian energy supplies flowing into Europe.

Around 40% of Russia crude exports head to Europe, while the country accounts for about a third of inland gas demand in the region.

"In the hardest times of confrontation, Russia has proved it is an absolute guarantor of energy security in Europe and the most reliable energy supplier to its customers," he said.


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