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Russian President Vladimir Putin told an energy conference in Moscow on Wednesday that Russia and Saudi Arabia would “most likely” extend output cuts into 2024 and warned that clashes in the Middle East could impact oil exports with higher shipping and insurance costs.
"I am sure that the coordination of the OPEC+ partners' actions will continue," Putin told the conference.
"This is important for the predictability of the oil market, and ultimately for the well-being of all mankind," Putin added, noting that while Russia and Saudi Arabia would likely “continue [their] cooperation”, “we need to consult with colleagues - our decisions are made by consensus”.
In the last days of September, OPEC+ decided to keep current oil production cuts in effect until the end of the year, extending 1-million-barrel-per-day supply cuts that began in July through December 31, 2023. Russia also extended its 300,000 barrels per day export cut until the end of the year.
After Brent crude’s brief flirtation with up to $97 per barrel in late September, oil prices have pared gains, again rallying briefly with the Hamas missile attack on Israel over the weekend, which has led to a declaration of war by Israel.
On Wednesday, Israeli Prime Minister Benjamin Netanyahu and opposition leader Benny Gantz formed an emergency unity government for conflict decision-making as Israel places the Gaza Strip under siege, stripping it and its 2 million people of all power and electricity.
That second rally on the potential for a Middle East conflict to threaten supplies was short-lived. On Wednesday at 12:34 p.m. ET, Brent crude was trading at $86.61, down 1.19% on the day. West Texas Intermediate (WTI) was trading at $84.46, down 1.76% on the day.
At the Moscow conference, Putin was standing beside Iraqi Prime Minister Mohammed Shia Al-Sudani, who has asked the Russian leader to “mediate” in the Israel-Hamas conflict.
Putin is calling for the creation of a Palestinian state to resolve the conflict, and is using this as a platform to bring attention to what he calls the “failure” of Washington’s Middle East policy, The Moscow Times Reports.
By Charles Kennedy for Oilprice.com
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Charles is a writer for Oilprice.com