Russia says oil price war with US would be too costly

DAVOS: Russia should not unleash an oil price war against the United States but rather stick with output cuts even at the cost of losing market share in the medium term, one of the main Russian architects of a production pact with Opec said.
Since 2017, Russia and Opec have cut oil production jointly for the first time in an effort to boost the price of crude. Following their supply pact, oil has traded between roughly $60 and $85 per barrel, from below $30 before the deal took effect.
“For US shale production to go down, you need oil prices at $40 per barrel and below. That is not healthy for the Russian economy,” Kirill Dmitriyev, head of the state-backed Russian Direct Investment Fund, said on Wednesday.
“We should not take competitive action to destroy US shale production,” said Dmitriyev, speaking at the World Economic Forum in Davos, Switzerland.
Three years ago in Davos, Dmitriyev became the first Russian official to mention publicly the possibility of a supply pact with the Organization of the Petroleum Exporting Countries. At that time, oil prices had collapsed after Opec kingpin Saudi Arabia raised output to hurt higher-cost US producers.
The rise in prices thanks to output cuts has brought roughly an additional $110 billion in revenues to Russia, Dmitriyev said. — Reuters