OPEC Plus Deal: Russia seeks cooperation with OPEC under US sanctions

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Europe

02:05

The oil producing club of countries, known as OPEC, says it will try to ensure a steady supply of oil, as new American sanctions against Iran come into force this weekend. It comes as OPEC formalises a bigger group, known as OPEC plus, which will be led by Russia. Dan Ashby has this report from Moscow.

The world runs on oil - and now there's slightly less of it in circulation. President Trump's sanctions against Iran have come into effect. The club of oil-producing countries - OPEC - say they will try to replace any lost production. But it's a delicate situation.

IGOR YUSHKOV ANALYST, NATIONAL ENERGY SECURITY FUND "Basically Saudi Arabia will replace these volumes of oil extraction and partly, so will Russia. But there is also a risk. If Saudi Arabia and Russia start replacing Iran's volumes, Iran could say it will leave the OPEC deal. This could bring about a fall in the oil price. It's a fine balance."

All this, as OPEC announces plans to formalise OPEC plus - an even bigger group of oil producers led by Russia.

DAN ASHBY MOSCOW "OPEC plus will mean that Russia and Saudi Arabia stay at the forefront of controlling oil production - and, to a large degree, oil prices. But it faces criticism that it is effectively a cartel."

President Trump tweeted that OPEC is a monopoly, that "continues to push for higher and higher oil prices..." OPEC countries say they aim only for economic stability - but Russia's influence may be short-lived.

MIKHAIL KRUTIKHIN ANALYST, RUSENERGY "Starting maybe next year, or two years from now, the Russian oil production is going to peak and start decreasing. Maybe by 2035, about 40% of Russia's oil production is going to disappear. Well maybe it will cease to be the supplier of oil to the global market at all."

Iranian sanctions will test OPEC's resilience further. But the group insists that oil supplies will not be affected. Dan Ashby, CGTN, Moscow.