The OPEC+ group should have no further need to cut crude oil production, according to Alexander Novak. The Deputy Prime Minister of Russia made the claim despite growth in demand from China being weaker than anticipated.
When asked if OPEC+ might cut production to stop oil prices from falling, Novak suggested it was too early to see the effects of the last combined cuts of 1.16 million barrels per day (bpd):
“Well, no, of course not. Because we only made a decision (on the reduction) a month ago, and it will come into force from May for those countries that have joined.”
He added that given the reductions that had already been decided by OPEC+, as well as reductions in other countries, he believed the market was currently balanced. He also hit back at the warning from the International Energy Agency (IEA) that the production cuts risked worsening a deficit in the supply of oil later this year, saying that he did not anticipate any shortages in the global crude oil market, even with the cuts.
Novak also said that Russia had achieved its own previously announced target of 500,000 bpd in production cuts. Following the country’s invasion of Ukraine, a number of internal oil and lubricant companies like Shell, BP and ExxonMobil have pulled out of their Russian investments. Sanctions have meant that Russia has struggled to find customers for its crude oil, although much of the oil and derived products that would have been destined for Europe has been diverted to Asia.