Russia ready to modify OPEC+ production if necessary

The OPEC+ group is still studying whether to increase oil production, but it would act on supply if necessary, Russian Deputy Prime Minister Alexander Novak said. said Tuesday.

The possibility of increasing supply is still under consideration, Russia’s top oil company said, reported by the Russian news agency Interfax.

“It always depends on the current situation, the balance between supply and demand,” Novak said.

“Everything is analyzed. Right now you don’t need to predict anything, you just need to see how the market feels,” he said.

Novak added that OPEC+ members are “constantly monitoring the situation, and this is our plan for the second quarter. We have agreed with our colleagues that these voluntary reductions can be adjusted to increase supply if necessary.”

“It’s a constant process,” Novak emphasized.

The OPEC+ group meets on June 1 to decide how to proceed with current production cuts in the second half. The current supply agreement, which removes about 2.2 million barrels per day (bpd) from the market, including Saudi Arabia’s voluntary reduction of 1 million barrels, expires at the end of June.

As of late last week, OPEC+ had yet to begin formal negotiations on the alliance’s production policy, sources at producers participating in the deal told Reuters.

If oil demand does not accelerate, the group could maintain oil production cuts, the sources added.

“We think there is a good chance that OPEC+ will extend beyond June – but we don’t have a definitive view yet as we don’t think they have actually entered the true period discussion and decision-making,” Richard Bronze of consultancy Energy Aspects told Reuters.

The majority of analysts expect OPEC+ to extend the cut until the second half of 2024, according to a Bloomberg survey last week.

By Tsvetana Paraskova for Oilprice.com

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