Oil Prices Are Under Pressure, But Russia Says OPEC Deal Is Working

OPEC members agreed last week to extend a 2016 initiative to lower their collective oil output to help boost oil prices. However, the price of oil is now trading lower than it was prior to the extension of the agreement which further puts into question how effective the 13 members are at controlling oil prices.

Despite oil trading near a three-week low, Russia's Economy Minister Maxim Oreshkin thinks OPEC's agreement, of which it and a handful of other non-OPEC members are a part of, is in fact helping to support oil prices.Speaking from the St. Petersburg International Economic Forum, Oreshkin told Bloomberg's Erik Shatzker that the agreement has "not failed at all" and has achieved a primary endpoint of lowering oil inventories across the world.

'It's Not A Problem For Us'

"We will do everything that is possible to bring the inventory levels to low levels and make the market tight on the short-end of the curve," he said.

Meanwhile, oil prices remain notably higher than it was before the original agreement was ratified. As such, the argument is being made that the OPEC agreement at the very least is preventing the commodity from gravitating toward its 2016 lows of less than $30 a barrel.

Finally, Russia's economy isn't as dependent on the price of oil today than it was five to 10 years ago, the minister added. In addition, the Russian government is operating under the assumption that oil will trade at $40 per barrel, and it can continue operating "forever" at these levels.

"It's not a problem for us," he concluded.

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