DAVOS, Switzerland - 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 U.S. shale production to go down, you need oil prices at $40 per barrel and below. That is not healthy for the Russian economy," Kirill Dmitriev, head of the state-backed Russian Direct Investment Fund, said on Wednesday.
"We should not take competitive action to destroy U.S. shale production," said Dmitriev, speaking at the World Economic Forum in Davos, Switzerland.
Three years ago in Davos, Dmitriev 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 U.S. producers.