Russia: OPEC+ does not see a need for new oil production cut

Russian Deputy Prime Minister Alexander Novak said today, Thursday, that the OPEC + alliance does not see a need for an additional reduction in oil production, despite the fact that Chinese demand was less than expected, but he added that the group is always able to adjust its policy.

According to Reuters, he also said that Russia had reached the target level of its oil production this month after announcing a production cut of 500,000 barrels per day, or the equivalent of five percent of its production, until the end of the year.

Russia is a member of the OPEC + alliance of oil-producing countries, which announced a surprise cut in the total production of member states by 1.16 million barrels per day earlier this month, a move that the United States described as an unwise measure.

Novak added that Russia’s production of oil and gas condensate is expected to decline to about 515 million tons this year from 535 million tons in 2022 (equivalent to ten million barrels per day), which is largely in line with a report published by Reuters this week. ..

In response to a question about whether the coalition needed to make more production cuts in light of the decline in oil prices, Novak said, “Well, no, of course not. Because we made a decision (related to the reduction) a month ago, and it is the decision that will be applied as of May.”

He added that the alliance does not expect a shortage in oil supplies in global markets after cutting production, as expected by the International Energy Agency. The IEA had said that cutting production risked exacerbating the oil supply deficit in the second half of the year

Novak said, “In my opinion, the market is now balanced, taking into account the decisions that were taken earlier, as well as the reduction that we made, and the reductions that we witnessed in other countries.”

Russia was able to maintain its production and exports of oil thanks to its ability to divert its sales of energy products outside Europe, its traditional market, after it was subjected to harsh sanctions due to its invasion of Ukraine.

Novak said Russia will export 140 million tons of crude oil and oil products to Asia this year, the amount previously exported to Europe. He added that his country will supply the West with quantities ranging from 80 million tons to 90 million tons of crude and oil products in 2023.