Brittany Sturdivant
October 22, 2008
6:36pm
OPEC is testing the prospects to see if Russia will be able to join other countries with the production cuts so that the country can help support global prices. OPEC is the Organization of Petroleum Exporting Countries and they are trying to make the country cut back on their oil production. President Dmitri Medvedev is saying that Russia is interested in having closer and stronger ties with cartel, but he’s stopped short of all of the reduction in Russia’s oil output. The OPEC visited Russia today to deliver a message to Russia letting them know that they were not the only country that may go through the crisis. I do not think it’s such a good idea to cut the oil production in Russia especially since Russia is a very large oil producer and exporter. I understand that the production cut will help support global prices, but this entire deal sounds a little risky to me. Russia is the second largest country in the world after Saudi Arabia to pump a large portion of oil a day. Russia pumps about 9.8 million barrels of oil a day and I feel like if they continue to go on with the production cut, Russia will lose a lot and the country will began to go downhill. Russia already depends on 70% of its exports and 60% of its national budget so with the production cut the country will be losing a lot.
http://www.iht.com/articles/2008/10/22/business/ruble.php
1 comment:
I think that maybe production cuts are a good idea, but this is a really tough call since Russia depends that much on oil for its exports and national budget.
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