The group, of which Russia is joint leader with Saudi Arabia, is currently restoring about 2 million barrels a day of idle production in monthly installments that end in July. The alliance may need to keep ramping up in August or September to feed the demand recovery, said Gazprom Neft PJSC Chief Executive Officer Alexander Dyukov.
“It’s important not to allow the market to overheat,” Dyukov said at the St. Petersburg International Economic Forum on Thursday. “An oil price in a range of $65 to $70 a barrel isn’t stable in the long term.”
The Organization of Petroleum Exporting Countries and its allies gave few hints about output policy beyond July when they met earlier this week. While Russian Deputy Prime Minister Alexander Novak has been a consistent advocate for production increases, his Saudi counterpart has preferred to keep a tighter rein on output.
“We’ll have to see demand before you see supply,” Saudi Energy Minister Prince Abdulaziz bin Salman said in St. Petersburg.
With Brent crude already above $70 a barrel, it’s necessary to raise output as consumption grows, said Vagit Alekperov, CEO of Lukoil PJSC, Russia’s second-largest oil producer.
“Many countries are exiting from those restrictions introduced during the pandemic,” he said. Consumption of “gasoline has already reached the level of 2019 both in Europe and Russia. Domestic flights in the U.S. have increased to almost the pre-pandemic level. Thus additional fuel will be required.”
Russia’s Novak said he sees global oil consumption recovering to pre-pandemic levels next year. Alekperov would like to see OPEC+ raise output by at least 500,000 barrels a day each quarter to satisfy the additional demand.
“We shouldn’t allow a sharp hike in the price,” Alekperov said.