Much has been said over recent months about the possibility of Russia joining the Organization of Petroleum Exporting Countries. In the coming months, we’ll probably hear more, too.
A week or so ago, Qatar’s Oil Minister Abdullah bin Hamad Al-Attiyah expressed the hope of seeing Russia one day become a full member of OPEC as it would “add value” to the organization.
“I wish one day to see Russia as a full member of OPEC,” Al-Attiyah said in an interview. “Russia as the second (largest) oil exporting country (after Saudi Arabia) has a strong role in the oil market, so if Russia were to join OPEC, it would add value,” he said.
But even Al-Attiyah had to acknowledge that his wish has little chance of being fulfilled—at least for the moment. “So far the Russians support cooperation, but they don’t talk about full membership,” he said.
Rising speculation
Speculation about Russian membership arose after Russia sent its most senior delegation in a decade to OPEC’s Sept. 9 ministerial meeting in Vienna. At the meeting, Russian Vice-Premier Igor Sechin proposed extensive cooperation between Russia and OPEC to meet global energy needs.
Sechin said at the time that “a draft memorandum of understanding will be submitted” on the matter to OPEC’s leaders. But even Sechin didn’t suggest that Russia would consider becoming an OPEC member.
Sechin said that Russia and OPEC aimed to increase the predictability and transparency of “all factors that affect the market conditions.” He said it was “impossible to imagine” how global energy security could be strengthened “without a dialogue between Russia and OPEC.”
Cooperation could include joint projects between Russian and OPEC national oil and gas companies, joint investments and the sharing of technology, as well as environmental issues, Sechin said. But again, he said nothing about becoming a member of OPEC.
Russians say ‘nyet’
With all due respect to our friend Al-Attiyah and other esteemed OPEC ministers, there is no reason to think that Sechin or any other Russian official ever would want to join the organization.
After all, what is OPEC about except creating and maintaining production quotas on its members to ensure that none of them deliberately—or even accidentally—destabilizes prices by adding too much or too little oil to the market.
Frankly, it’s a little hard to imagine Vladimir Putin or any of his minions accepting the idea of limits to production imposed by anyone. And that, of course, is exactly what OPEC would want to do with a Russia that already can seriously undermine international markets.
Between Russia and OPEC there is no great love lost. Each side recognizes that it can undermine the other and both sides want the other to know that. At best, we’ll see an uneasy cooperation between OPEC and Russia. On the question of joining OPEC, Russia’s answer will remain “Nyet.”
