A New Global Oil Deal Could Draw Lessons From 1998

But with the Russian rouble sinking to a record low and a parliamentary election this year and a presidential election in 2018, pressure is rising on the Kremlin to protect state revenues and limit public discontent.

"Grand Bargain"

Russia's latest rhetoric has left OPEC watchers and Kremlinologists guessing if it is just a verbal intervention to lift oil prices or whether it is part of a real deal for Putin, which may also involve a compromise with Saudi Arabia over Syria or indeed any other "Grand Bargain".

Putin has dispatched heavyweight veteran foreign minister Sergei Lavrov to the Middle East this week. Lavrov, who has almost never spoken about oil, will travel to Oman and the UAE to discuss the oil market.

Meanwhile, Venezuelan Oil Minister Eulogio Del Pino will visit Russia, Qatar, Iran and Saudi Arabia this week to drum up support for a joint cut in oil production.

And just like in 1998, behind-the-scene talks are gathering pace. When Putin met the Emir of Qatar last month in Moscow, oil was on the agenda, according to a senior source in the Gulf.

And just as in 1998 and 1999, when it took two years and many secret meetings in Miami, Madrid, the Hague, Amsterdam and Riyadh to clinch two decisive supply cuts, the process in 2016 could be equally painful.

The head of Kremlin-backed Russian Direct Investment Fund, Kirill Dmitriyev, said a deal between Russia and OPEC was possible but at the right time, "maybe within a year", when the markets rebalance and it became easier to reach agreements.


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