Just hours after President Trump implicitly threatened Saudi Arabia with a withdrawal of military protection (a threat that was possibly inspired by OPEC+ ignoring Trump's demands to raise production at its Algiers meeting last month) Russian President Vladimir Putin said out loud what many oil traders have been thinking: That the recent run up in oil prices is Trump's own fault.
During a speech at the Energy Week conference in Moscow, Putin said higher prices are "to some extent the result of the US administration" and its decision to reimpose sanctions on Iran (which will take effect next month) as well as its sanctions against Venezuela - not to mention the disastrous US military intervention in Libya, which was masterminded by Trump's erstwhile political rival, Hillary Clinton. Before Trump decided to withdraw from the Iran deal, OPEC and other major exporters (including Russia) had more or less pushed the global market back into balance after several years of oversupply. Putin also said he believes a "good range" for oil prices would be between $65 and $75 a barrel and that Russia has the capacity to ramp up production by 200,000-300,000 barrels a day (and according to media reports, Russia is indeed planning to ramp up production through the end of the year).
"President Trump has said he thinks the oil price is too high. Well, probably to some extend he's right, but we are absolutely OK with it at $65 to $75 per barrel to ensure the efficient operation of oil companies and ensure investment," Putin said Wednesday during an address to delegates at the Russia Energy Week forum in Moscow.
"But let's be frank, such oil prices are to some extent the result of the U.S. administration. I'm talking about sanctions against Iran, about political problems in Venezuela and just looking at what's happening in Libya."
Trump has criticized OPEC for agreeing to cut production at its meeting in Vienna nearly two years ago, and has since urged Saudi King Salman to push prices lower. Later in his speech, Putin vowed that Russia would complete the Nord Stream 2 gas pipeline to Germany on its own even if EU partners are forced to abandon the project due to US sanctions.
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Here's a roundup of BBG headlines from Putin's speech:
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We now wait for the president to respond, perhaps with a tweet that once again blames Saudi Arabia for higher oil prices.