“Today OPEC+ countries can’t increase production to the extent necessary to meet demand,” Otabek Karimov, the Russian company’s vice president for commerce and logistics, said at a conference. “As a result, there is a very serious deficit of energy resources in the whole world today. Naturally, this cannot but affect the price.”
Crude has soared almost 60% to above $82 a barrel this year as the recovery from the pandemic boosts demand while the Organization of Petroleum Exporting Countries and its allies are only gradually boosting supply. Russia’s President Vladimir Putin said last month that $100 oil is “quite possible,” a view shared by Eni SpA and Trafigura Group. Bank of America thinks it could go even higher to $120 by June.
Karimov’s comments come a day after senior officials from Russia, Saudi Arabia and the United Arab Emirates — all members of OPEC+ — said they expect the global market to become oversupplied soon, which could push prices lower and justifies the group’s cautious approach. The International Energy Agency expects the price rally is coming to an end.
While OPEC+ is digging in its heels on monthly hikes of 400,000 barrels a day, actual increases are falling short with members such as Nigeria and Angola struggling to raise supply amid a lack of investments. Russia though produced above its quota last month, according to the IEA.
Rosneft, Russia’s largest oil producer, has been complying with output restrictions under the agreement, but has historically opposed Russia’s involvement in the OPEC+ pact. The company has said it plans to raise output quickly once the agreement end in 2022, and is targeting output of as much as 30 million tons of oil, or about 600,000 barrels a day, from its future Vostok Oil project as soon as in 2024.