OPEC Deal Extension Would Benefit Russia, Finance Minister Says

(Bloomberg) -- Russia would benefit from extending the accord with OPEC to limit oil production, said the country’s finance minister.

“Extending the deal would be beneficial for all involved,” Anton Siluanov said in an interview with Bloomberg News. Failure to do so would probably lead to a “sharp change in price.”

Russia, whose largest single source of tax revenue is oil, is working with the Organization of Petroleum Exporting Countries to eliminate a global supply glut and support prices. Siluanov is not directly involved in negotiations with the cartel, which are handled by Energy Minister Alexander Novak. He has said an extension of the agreement beyond the first quarter of 2018 is possible, depending on the supply and demand balance.

While OPEC, Russia and their other allies have largely implemented and maintained their pledged cuts, the reduction has spurred shale oil output in the U.S., limiting the price gain resulting from the historic accord. This has put pressure on OPEC to prolong the curbs.

Russia is interested in maintaining stability, avoiding volatility and sharp price fluctuations, Siluanov said.