-Caveat Lector- <A HREF="http://www.ctrl.org/"> </A> -Cui Bono?- STRATFOR.COM Global Intelligence Update 30 March 2000 Russia Tries to Influence OPEC's Next Decision SUMMARY In an unexpected step, Russian President-elect Vladimir Putin sent his first international message to an unusual recipient, Algerian President Abdelaziz Bouteflika, stressing the importance of a high- level bilateral relationship between their countries. In light of global concern over oil prices and production, it appears that Russia is in fact lobbying Algeria. Although it is a petroleum exporter, Russia is at the mercy of OPEC. But with the help of an OPEC member such as Algeria, Moscow may be able to gain a valuable ally in the cartel's next decision on production and prices, due in June. ANALYSIS In the midst of a busy first week as Russia's president-elect, Vladimir Putin crafted a note to Algerian President Abdelaziz Bouteflika and sent it with Gennady Seleznev, speaker of the Russian State Duma, on his trip to Algiers, March 28. Putin wrote, "It is important now to develop the existing prerequisites for taking an entire complex of bilateral contacts to a new and maximum high level," reported ITAR-Tass. Considering the symbolic importance of the act - and the unremarkable history of Russo- Algerian relations - this move initially seems surprising. The gesture, although too late to have an impact on this week's Organization of Petroleum Exporting Countries (OPEC) conference in Vienna, is the first Russian move to solidify ties with Algeria. The overture appears to be part of a Russian strategy to play a hand in the next round of decisions over the price of oil. Although Russia has exported more than 3.5 million barrels of oil yearly, it has no say in questions of production and prices within OPEC. By beginning to cultivate an ally in a small OPEC nation, Algeria, Moscow may be trying to exert some influence over the next round of production decisions, due in early June. After several intense days of debate, nine of the 11 OPEC nations agreed March 29 to increase oil production by a total of 1.45 million barrels per day (bpd). Each member, including Algeria, Saudi Arabia, Libya, Nigeria, Indonesia, Kuwait, Qatar, United Arab Emirates (UAE) and Venezuela, will increase its output by varying amounts beginning April 1. Iraq is excluded from the arrangement because United Nations resolutions govern its oil exports, and Iran has refused to sign the deal, but will likely increase production in order not to lose out, due to the expected drop in prices. Moscow, facing significant losses as a result of increased oil on the market, opposes the OPEC plan. Russia's oil production is currently at its maximum capacity, putting Russia in a nearly indefensible position as other producers boost exports. If the current situation holds, Russia will only be able to sit by and watch the value of its oil exports drop; oil revenues account for 40 percent of the country's hard currency. Russian Fuel and Energy Minister Viktor Kalyuzhny has said that Russia wants to keep world oil prices at $26 to $28 per barrel. But prices had already fallen below $25 per barrel at the close of business on March 28 - before the OPEC announcement. The cartel plan is expected to push prices down to $20 to $25 per barrel. Moscow's only hope for influence lies in gaining an ally at the next OPEC conference. Because they represent a non-member nation, Russian delegates can only observe these meetings. On June 21, the OPEC countries will meet again in Vienna to examine world oil prices and adjust output again, if necessary. This gives Moscow about three months to ally itself with an OPEC member that will vote with Russia's concerns in mind. Algeria, which was instrumental in organizing the cuts and held out against the production increase, seems the best candidate for a potential Russian proxy. Beginning with Putin's affectionate note, Moscow will likely embark on a three-month campaign to win support. The Kremlin has two levers that it may use to influence Algiers. First, Russia may try to gain more influence in Algeria through deals on arms sales. Bouteflika's government, however, may be more vulnerable on the question of Algeria's foreign debt. Algeria owes Russia between $1.5 billion and $6 billion, according to ITAR-Tass. The debt gives Putin leverage, and it can be slimmed down in exchange for a promise of Algerian support during OPEC's midsummer meeting. Putin seems to have just initiated an attempt to control world oil prices through cartelism. (c) 2000, Stratfor, Inc. http://www.stratfor.com/ ================================================================= Kadosh, Kadosh, Kadosh, YHVH, TZEVAOT FROM THE DESK OF: <[EMAIL PROTECTED]> *Mike Spitzer* <[EMAIL PROTECTED]> ~~~~~~~~ <[EMAIL PROTECTED]> The Best Way To Destroy Enemies Is To Change Them To Friends Shalom, A Salaam Aleikum, and to all, A Good Day. ================================================================= <A HREF="http://www.ctrl.org/">www.ctrl.org</A> DECLARATION & DISCLAIMER ========== CTRL is a discussion & informational exchange list. Proselytizing propagandic screeds are not allowed. Substance�not soap-boxing! These are sordid matters and 'conspiracy theory'�with its many half-truths, misdirections and outright frauds�is used politically by different groups with major and minor effects spread throughout the spectrum of time and thought. 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