Commentary by Eric Wilder – Russia is the largest non-OPEC crude oil exporter and has had relations in the past with OPEC.  OPEC just announced it would begin meeting with Russia on a yearly basis to coordinate policies.  Russian minister of industry and energy, Viktor Khristenko and Sheik Ahmad Fahad Al Ahmed al-Sabah, outgoing president of OPEC, recently met in Moscow.  The announcement of the agreement between Russia and OPEC was issued after the meeting.

OPEC’s daily production capacity has been perceived lately as unable to keep up with world demand.  This has reduced their former inherent ability to influence crude oil prices by simply announcing a cut or increase in their daily output.  The new agreement is possibly an attempt to bolster its diminished influence on the energy market.  By joining with Russia, OPEC would control a greater percentage of the world’s daily production of crude oil and give them greater control over price fluctuations.  The agreement also has positive ramifications for Russia.

Is Russia joining OPEC?  As a member, no.  As an ongoing partner, absolutely.

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