Although the political changes announced in Russia on Wednesday raise questions about the country’s future OPEC strategy, analysts say they are expecting President Vladimir Putin, the key advocate of the OPEC oil production cut deal, to maintain its impact on Russian energy policy.
Not much change is expected in Russia’s energy policy.
Energy is traditionally the direct authority of the Kremlin and Vladimir Putin, due to the Russian president’s personal interest in energy issues and active use of Russia as a foreign policy tool. This includes the role of Putin and, consequently, Russia’s supporter of oil producers in the OPEC group.
The current energy minister, Alexander Novak, has secured and sustained the OPEC production restriction agreement, which raises oil prices, while also creating lucrative opportunities for Russian companies to increase bilateral cooperation with OPEC member countries.
Earlier this week, OPEC Secretary General Mohammed Barkindo noted the importance of individuals in the success of the agreement.
Barkindo welcomed that the bond between the participating countries has become very strong, including personal friendships between nations during the International Petroleum Technology Conference in Saudi Arabia.
On Thursday, Mikhail Mishustin was appointed Prime Minister, but it will be announced later whether current ministers, including Novak, can maintain their place in the new cabinet.
Those who play a role in other key points of the energy sector are as follows; Deputy Prime Minister responsible for energy policy, currently Dmitry Kozak; the minister of natural resources, currently Dmitry Kobylkin; the finance minister is currently Anton Siluanov; economy minister, currently Maksim Oreshkin; and the foreign minister is currently Sergei Lavrov. Whether they protect their places or transfer them to others will soon become clear. Everyone will continue to do their job until someone new is appointed.
Energy is a vital sector for Russia, which produces over 11 million b / d of crude oil and is Europe’s largest natural gas supplier. Revenues from the oil and gas industry accounted for more than %40 Russia’s budget revenues in 2019.
Oil and gas exports are primarily paid in foreign currency and help the government reduce the impact of volatility in the ruble exchange rate.
It is not yet clear what kind of energy policy Prime Minister Mishustin himself supports, but he has a reputation for efficiency and innovation. However, it is thought to strengthen traditional policies financially.
Mikhail Mishustin has an impressive history that has significantly improved tax collections and adopted new technologies throughout his tenure, with his performance in his last mission.
Analysts think Putin will continue to play an important role in Russian political life after 2024. The constitutional reform plans, announced on Wednesday, will carry some powers from the president to parliament and prime minister. Putin’s presidential mandate expires in 2024. However, it is necessary to see what the new constitutional regulations bring.