Official: Russia needs oil output growth to meet seasonal demand

MOSCOW, Mar 5 (PRIME) -- Russia will raise oil production in April by 130,000 barrels per day to cover higher local demand, Deputy Prime Minister Alexander Novak told channel Rossiya 24 late on Thursday after a meeting of the OPEC plus agreement participants.

"Production in the OPEC plus states will remain at the level of March in April, while exemptions will be made for Russia and Kazakhstan,” Novak said.

“We will raise output by 130,000 barrels per day in April… It is very important for us because we have seasonal demand, we have to raise refining volumes at the refineries and provide for rising demand for oil products in Russia."

The official said that since there is no lockdown in Russia, demand at the fuel stations is higher than in March 2020.

Russia is raising oil production faster than the rest of the agreement participants but will join the common schedule when demand in the other countries recovers.

"We assume that if in the future, OPEC plus states raise output, when demand recovers, we will join the general schedule," Novak said.

But Russia has always fulfilled the terms of the deal by 100%, while in February compliance was even a bit higher.

Global oil demand will reach the pre-crisis level at the beginning or in mid-2022, he said.

According to Novak, deficit on the global market is a good thing because it diminishes excessive reserves but OPEC plus must not overheat the market.

Saudi Arabia’s Energy Minister Abdulaziz bin Salman Al-Saud said that Saudi Arabia has no fear that the decision to keep oil production at the current level will overheat the market.

The OPEC+ countries agreed to reduce their oil output by 9.7 million barrels per day in May 2020 to fight the consequences of the global coronavirus crisis, with Russia’s share of 2.5 million barrels per day. The cut was narrowed to 7.7 million barrels per day for August–December 2020, and then to 5.8 million barrels per day until May 2022. The agreement is valid until April 30, 2022, but the members will revise its extension in December 2021.

The next OPEC plus meeting is slated for April 1, while a meeting of the Joint Ministerial Monitoring Committee will take place on March 31.

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