Exclusive-Russia's Dmitriev says Russia, US and Saudi Arabia could act jointly to stabilise oil markets

Amidst rising oil prices due to escalating Middle East tensions, Russia's investment envoy Kirill Dmitriev suggested that Russia, the United States, and Saudi Arabia could jointly intervene to stabilize oil markets, citing a precedent from 2020 when Presidents Putin and Trump, along with Saudi Crown Prince Mohammed bin Salman, coordinated output cuts during the COVID-19 pandemic; Dmitriev noted that rising oil prices could potentially reduce the likelihood of further restrictions on Russia's energy sector.

Analysis

Oil prices have experienced a significant surge following reports of an Israeli attack on Iranian nuclear sites, escalating fears of a broader Middle East conflict and potential disruptions to crude supplies. In response to this market volatility, Russia's investment envoy, Kirill Dmitriev, indicated that Russia, the United States, and Saudi Arabia could potentially undertake joint action to stabilize oil markets, referencing a similar coordinated effort in the spring of 2020 when these nations agreed to cut output amidst plummeting prices during the COVID-19 pandemic. While Dmitriev cautioned that it is currently 'early to talk about concrete joint action,' he affirmed that such intervention 'is possible.' Furthermore, he posited that the current dynamics of rising oil prices, driven by Middle Eastern events, 'sharply reduce the possibility of further restrictions on Russia’s energy sector,' alluding to ongoing European Union deliberations on tightening sanctions against Moscow.

Key Decisions for Investors

• Closely monitor escalating geopolitical tensions in the Middle East for their direct impact on crude oil supply and price volatility.
• Assess portfolio exposure to energy price fluctuations and consider strategies to manage potential heightened volatility in oil markets.
• Evaluate the likelihood and potential impact of a coordinated intervention by major oil producers (Russia, U.S., Saudi Arabia), and factor in the possibility that rising oil prices may temper further sanctions on Russia's energy sector.