Speaking on the sidelines of today’s military parade in Beijing, Russian President Vladimir Putin and Venezuelan President Nicolás Maduro discussed the enormous problem both of their respective petrostates are currently facing: the crashing price of oil. While a member of OPEC, Venezuela has been vocally unhappy with the cartel’s decision (pushed by Saudi Arabia) not to set a floor to the oil market by cutting oil production. Meanwhile, Russia’s economy is reeling as it’s hit by both Western sanctions and falling revenues from oil exports.But one senior Russian official poured cold water on the notion of any bilateral effort to tinker with the global oil market, as Reuters reports:
A senior source at the Russian government played down the significance of the meeting, saying the presidents would mostly discuss mutual cooperation and Russian ties with the Organization of the Petroleum Exporting Countries (OPEC).“They (Putin and Maduro) will exchange their views on the oil market, that’s it. It is highly unlikely that any measures will be agreed to prop up prices. How can you imagine two countries cutting their production? Their market share will be quickly snapped up by others in that case,” he said.
For his part, Venezuelan president Nicolas Maduro simply said he had some “not bad ideas” on the question of how to stop the slide and stabilize the price of oil, but it’s hard to imagine either country constraining its supply (in fact, Russia already said this week it would not purposefully cut production). With that option out of the window, there’s little else to do but hope other producers might cut theirs—either the Saudis by strategy or American shale producers by necessity—or else wait for an uptick in global demand.