Saudi Arabia may be the world’s largest exporter of crude oil, but Russia is its largest producer. Hence the importance of Russia’s participation in the agreement between OPEC and some non-OPEC producers to extend their pledge to cut output until the end of the first quarter of 2018.
Stable oil prices at acceptable levels are vital for the health of Russia’s economy. An efficient oil industry is just as important. One of Vladimir Putin’s senior advisors has recently suggested, radically, that the oil industry should be fully privatized.1 The gauntlet has certainly been thrown down to the country’s state-owned companies.
Brent Crude Oil Price: USD and RUB
6/5/2012 – 6/6/2017
Source: FactSet
About the Author:
Michael Cohick joined VanEck in 2011. He serves as a product manager responsible for VanEck Vectors non-taxable fixed income and industry equity exchange-traded funds. Prior to joining VanEck, he worked at ING Investment Management. Mr. Cohick earned an MS from Columbia University and a BA from Goucher College.
The article above is an opinion of the author and does not necessarily reflect the opinion of MV Index Solutions or its affiliates.
Footnotes:
1Financial Times: Senior Putin adviser proposes Russia oil industry privatization, June 1, 2017