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Sunday, March 18, 2018

Putin in Turkey made an unprecedented statement on limiting oil production

Visit the world energy Congress of Turkey was not originally listed in the schedule of Vladimir Putin. This is not an event, they are world leaders. And GDP itself easily have conceded far more important international meetings, for example, this year he did not go to the Munich security conference and the meeting of the UN General Assembly. However, in this case, the determining factor was not the event itself, and the venue of the Congress.

Going with the first after the restoration of Russian-Turkish relations visit to Istanbul, Putin once again confirmed the fairness of the famous saying of Churchill, who claimed that in politics there are no friends and enemies, and there are only mutual interests.

photo: kremlin.ru

Russia and Turkey such interests at the current stage, apparently, even more than ever. Both countries were in opposition to the West not only ideological, but also strategic reasons. Both claim to be building an independent domestic and foreign policies and want them considered in the international arena. Finally, both the face of economic challenges and constraints that need sources to overcome them.

The interest to restore full relations with the Kremlin prompted Ankara to take a seemingly impossible step: Turkish President Recep Tayyip Erdogan no longer insists on the immediate resignation of Bashar al-Assad and, according to some, is willing to reduce support to the Syrian rebels.

In Economics the interests of the two countries are to restore the previous level of cooperation. Before the incident with the Russian bombers, the trade turnover between Russia and Turkey exceeded 30 billion dollars. Another 15 billion was indirect trade. The new program of development of the bilateral relations (it is expected to sign before the New year) provides for the return to it within 1-1,5 years, and their subsequent increase. The strategic goal is to reach $ 100 billion. This trade Russia does not even with China.

The theme of the Congress also allowed Putin and Erdogan to discuss in detail the prospects for energy cooperation between the two countries – first of all the construction projects of nuclear power station “Akkuyu” and the pipeline “Turkish stream”.

Minister of energy Alexander Novak told journalists that a draft intergovernmental agreement for the construction of two “threads” of the pipeline – one for the domestic market of Turkey, the other to supply all of Europe (unless, of course, the Commission will give their consent) – is a high degree of readiness and could be signed on the sidelines of the summit. This will give Russia another distribution channel fossil fuels: the main thing, experts say, to bring the pipe up to the border with the EU, and before you know the wind will change, and the new leadership of the European countries will be more cooperative.

However, from the point of view of the image part of the energy Congress is unlikely to added points to Vladimir Putin. Russian diplomats almost gray, when I found out that the Turkish side wants to invite to the plenary meeting of the leader of Kosovo, and joint photographing of GDP prepared a place next to the President by anyone other than Turkey, not recognized by Northern Cyprus.

Among the VIP-guests of the Congress were no more or less well-known European and middle Eastern politics. But the American continent was represented by the head of Venezuela Nicolas Maduro, uses every opportunity to appeal to exporting countries for a better future to freeze the production of oil.

This time, however, Maduro was not alone. His appeals, leaving the podium, was actively supported by Vladimir Putin. Although in Russia there are no food riots, which from the beginning of 2016 rocked Venezuela, the rate of decline of incomes of the population seriously concerned about the power and possibilities of impoverished due to low oil prices, budget is clearly not enough to plug all the dangerous holes.

In Istanbul, Vladimir Putin said that Russia is ready to join the action by OPEC to limit oil production and called on other oil-producing countries to support this initiative.

However, the main reason for this step, according to him, are no difficulty in filling the Russian budget, and the desire to keep energy stable. The last two years, investment in the oil sector are plummeting, it means that oil overproduction will soon result in shortages and a new jump in prices, explained by the logic of GDP.

“In this situation, freezing, or even reducing production is, perhaps, the only way to preserve the stability of the entire global energy,” the President said.

Alexander Novak told reporters: previously, the possibility of reducing production by Russia was not considered. The energy Ministry on all international meetings advocated the freezing of existing production volumes. This version was in General agreement and a major oil company. Putin, however, as it turned out, ready to go even further. Now we have to discuss specific numbers and wait for the final position of OPEC: the decision on the quotas for the countries of the cartel should be taken 30 November in Vienna. While we are talking about fixing the volume of production of 32.5-33 million barrels per day.

P. S. After the speech of President Putin at the world energy Congress in Istanbul, the price of Brent crude reached $53.47 USD per barrel. The last time above $53 Brent was almost a year ago, 12 Oct 2015.

Relations between Russia and Turkey. Chronicle of events

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