OPEC on steroids

Russia isn’t a member of OPEC, but has the attitude down pat:

Russia wants to influence global oil prices through output forecasts and mothballing deposits for future development, Shmatko said on Thursday.

Shmatko said Russia’s policy would not involve coordinated action with OPEC states, although he said Russia admired OPEC’s influence on prices and should do its part to smooth the oil price “roller coaster ride” of recent months.

“We think that since we have such a significant position in the high society of world oil, a Russian factor should appear. We want to formulate our approach,” Shmatko told reporters.

“We think we should be more actively engaged in the market … From the point of view of forecasts we could express our view, perhaps even actively engage in that in a practical way,” Shmatko said. “The idea of mothballing oilfields seems very interesting to me.”

Gal Luft discussed the Saudi oil mothballing attitude in a recent Baltimore Sun oped:

[Saudi] per capita oil reserves are 130 times that of the U.S. Upon recent discoveries of oil in the kingdom, King Abdullah ordered that those new finds be left untapped to preserve the nation’s oil wealth for future generations. “When there were new finds, I told them, ‘No, leave it in the ground, with grace from God, our children need it,’” the king said.

So we can expect Russia to join the “Drill less” faction –(in case you missed Gal Luft’s recent Senate testimony: whenever non-OPEC countries drill more, OPEC drills less.) As the Department of Energy’s Energy Information Agency put it, focusing specfically on increased US drilling: “Assuming that world oil markets continue to work as they do today, the Organization of Petroleum Exporting Countries (OPEC) could neutralize any potential price impact of ANWR oil production by reducing its oil exports by an equal amount.”

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