Russian Sovereign Wealth Fund: "Russia and Saudi Arabia Are Very Close to Reaching a Production Cut Agreement"

▲ Kirill Dmitriev, CEO of RDIF [Image source=Reuters Yonhap News]

[Asia Economy Reporter Chunhee Lee] The head of Russia's sovereign wealth fund, the Russian Direct Investment Fund (RDIF), directly revealed on the 6th (local time) that Russia and Saudi Arabia have reached a very close consensus on crude oil production cuts.

Kirill Dmitriev, CEO of RDIF, stated on the US CNBC broadcast that "Russia and Saudi Arabia have come very, very close to an agreement on production cuts." He explained that "the entire market understands the importance of this agreement" and that "(the agreement) will bring very important stability to the market," emphasizing that the US and Russia have come very close to consensus.

Dmitriev referred to Russian President Vladimir Putin's proposal last week to cut 10 million barrels, saying, "(President Putin) spoke about how important this agreement is," reaffirming Russia's willingness to agree. He added, "Russia, Saudi Arabia, the US, and other countries believe they must intervene to stabilize the market and bring stability to the global economy, which is facing an unprecedented recession."

The OPEC+ video conference, originally scheduled for the 6th, which is a consultative body between the Organization of the Petroleum Exporting Countries (OPEC) and non-OPEC member countries, has been postponed to the 9th as Russia and Saudi Arabia criticized each other's responsibilities. The issue of production cuts was to be discussed at this meeting.

Currently, the global crude oil market is in turmoil after Russia and Saudi Arabia failed to reach an agreement on the volume and duration of production cuts at the OPEC+ meeting held on March 6 amid the COVID-19 crisis. Following the sharp drop in international oil prices, which has caused significant disruption in the oil market and is expected to severely impact the global economy, major oil-producing countries including Saudi Arabia, Russia, and the US are reportedly renegotiating production cuts at the level of about 10 million barrels per day.

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