Putin Has Begun To Fear A Collapse In Oil Prices

• 7.06.2025, 20:29

Brent crude has fallen 12% in price since the beginning of the year.

The Russian authorities fear that in the second half of the year, the oil market will be oversupplied, which will lead to a further drop in prices. This Reuters was told by a source familiar with the negotiations within the OPEC+ cartel, of which Russia is a member.

At its last meeting, in early June, OPEC+ agreed to increase production by 411,000 barrels per day, and taking into account similar decisions in May and April - by 1.2 million barrels per day. By the end of the year, the alliance plans to pour 2.2 million barrels of new daily supplies into the market - a record volume for 5 years.

Russia opposed the production increase at the June meeting, sources told Bloomberg and a Reuters interlocutor confirmed. The decision was pushed through by Saudi Arabia, which was asked by US President Donald Trump to lower oil prices.

The new OPEC+ quotas gave Russia the right to increase oil supplies by 262,000 barrels per day. But oil producers are in no hurry to pump more as they fear falling prices, Reuters writes.

Since the beginning of the year, Brent crude has fallen in price by 12%, while the cost of Russia's Urals grade has collapsed by 21% - from $66 per barrel in January to $52 in May. The budget, where every fourth ruble is provided by raw material rents, has cracked at the seams: oil and gas revenues fell by 12% in January-April, and by May the decline accelerated to 34%.