PM: Russia was not initiator of withdrawal from OPEC+ deal

MOSCOW, Mar 12 (PRIME) -- Russia didn’t initiate withdrawal from the OPEC+ oil output reduction deal, Moscow insisted on prolongation of the agreement, Prime Minister Mikhail Mishustin said on Thursday at a government meeting.

“The oil markets are under the impact of negative events, I mean the coronavirus epidemic and the decision of OPEC states to leave the oil output reduction deal. In this regard, I would like to point out the fact that it was not us who initiated the withdrawal from the agreement,” he said.

Russia suggested prolongation of the deal for at least until the end of June or the end of 2020 not to exacerbate the economy hurt by the coronavirus. The position was well reasoned and calibrated, as energy demand already fell because of the economic slowdown and contraction in international trade, he said.

Not only the Russian economy is hurt. International organizations estimated the cost of the latest coronavirus outbreak at about 0.5% of the global gross domestic product. The Russian government controls the situation even in the periods of instability of the global markets.

“The situation in the Russian economy is under control of the president and of the government. We have all the instruments necessary to pass it calmly and without shocks. We have enough resources to maintain financial stability,” Mishustin said, adding that the central bank and the Finance Ministry already took measures, which already brought some results.

The government is ready for different ways of the coronavirus situation development. It can meet its social obligations and ensure higher social payments and benefits it has planned, he said.

The oil prices now are as low as they were four years ago. The Russian economy managed to adapt to the situation then, and it now has a large safety cushion that would allow it to compensate budget losses for many years to come taking into account foreign exchange and gold reserves of the central bank and the money stored in the National Wealth Fund, he said.

At the same time, low oil prices and a weak ruble create not only risks, but opportunities for Russia as well.

“These opportunities are connected to imports substitution programs in the first place. It already brought some results. We are now working on additional measures to expand imports substitution in industry and in agriculture, we are expanding opportunities for exports of non-energy hi-tech products,” Mishustin said.

In spite of a dire situation outside Russia, the measures that the government has taken ensures reduction of chances of the virus spreading in Russia close to minimum, he added.

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