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Russia does not expect changes to OPEC+ policy at June meeting: Novak

Highlights

Expects oil price above $80/b

  • Author
  • Rosemary Griffin
  • Editor
  • Jonathan Fox
  • Commodity
  • Oil

Russian Deputy Prime Minister and key OPEC+ negotiator Alexander Novak said May 25 that he does not expect the group to take any new decisions at their next meeting scheduled for June 4.

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"I don't think that there will be any new steps, because just a month ago decisions were taken for some countries to make voluntary oil production cuts, due to the fact that we saw the slow pace of global economic recovery," Novak said in an interview broadcast on the Russia 24 TV channel.

Earlier this year Russia introduced a voluntary cut of 500,000 b/d from March after EU sanctions on imports of most Russian oil and G7 price caps came into force.

From May some other producers, including Saudi Arabia, Iraq and the UAE, pledged additional voluntary cuts, with a combined total 1.66 million b/d until the end of 2023. These cuts come on top of a 2 million b/d reduction shared by all OPEC+ members introduced in November.

Novak said he expects oil prices to rise.

"I think that the price will be slightly higher than $80/b, and I hope that in the summer demand will still grow," he said. "The production cut that many countries are carrying out today should also have an impact."

Platts, part of S&P Global Commodity Insights, assessed Dated Brent at $77.59/b on May 24.

Russian oil is trading much lower, however. Its key crude grade Urals was assessed at a discount of $25.35/b to Dated Brent on May 24.

Russian oil has been trading at major discounts since Russia invaded Ukraine in February 2022, triggering sanctions on its energy and financial sectors.

Novak said that the role of OPEC+ is to balance the market in the interests of producers and consumers and not to inflate prices.