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New Oil Cartel
March 21, 2016 13:45


Russia is planning to create a new cartel which will control over three quarters of the world oil. This has been said by the American Business Insider. The issue states that Moscow has started to increase its influence on oil extracting countries after the interference in the OPEC negotiations about the amounts of oil extraction.

Russia has even convinced a long ally of the USA – Saudi Arabia to take this step. It was possible after the relations between the two countries were wilted when USA has signed a nuclear agreement with Iran. “Saudi Arabia had to find a new ally who could protect their interests in the Persian Gulf given the possible aggression from the IS and Iran. Even though Russia and Saudi Arabia hold opposite positions concerning the Syrian crisis, the serious oil price collapse could create a window of opportunity for an alliance between Russia and Saudi Arabia” says Business Insider.

The freezing of oil extractions at January 2016 level doesn’t matter whatsoever due to the fact that it is enormous. Yet if Moscow could manage to reach an agreement with Iran that wants to increase its oil extraction after the withdrawal of sanctions and other countries from the Persian Gulf such as Iraq, then Russia de-facto becomes the leader of oil extracting countries which is 73% of the world oil export.

On top of that Russia stands for changing the currency of oil calculation from dollars to each country’s national currency and is already in the negotiating process about it. In case a new cartel is created (Business Insider called it ROPEC –Russian and OPEC) the probability that dollar will stop being the primary currency will increase immensely. “The cartel of the highest oil extracting countries in the world lead by Russia will shatter the current power balance. Given the immense potential the meeting in March (Russia and OPEC) will go much further than just talking about cutting down on oil extraction” the issue concludes.


Author: Anna Dorozhkina

Tags: Russian oil and gas industry     

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