Following consultations via videoconference, the ministers of producing countries decided to maintain the current March production levels for April, while Russia will be able to increase oil production by another 130,000 barrels per day in April.
According to Deputy Prime Minister Alexander Novak, following consultations via videoconference the participants in the meeting reaffirmed that they would maintain current agreements in order to continue the recovery of the global oil market in 2021. Novak said that at the consultations, it was decided to maintain the total level of oil production for OPEC+ countries in April 2021 at the level of March 2021, while Russia and Kazakhstan will be able to increase production by 130,000 and 20,000 barrels per day respectively due to the specifics of the seasonal oil consumption structure in these countries. Saudi Arabia also decided to extend an additional voluntary production adjustment of 1 million barrels per day for April 2021.
“The meeting was fruitful; we discussed the current epidemiologic situation, the state of global supply and demand in global and regional contexts, and reviewed mid-term forecasts. The need to stick to the current agreements was emphasised. We are closely following the key trends in the market. The global market has not fully recovered, but the overall situation is getting much better, and we hope that in 2022 we will reach pre-crisis levels of demand. At the same time, while continuing work to stabilise the market, it is necessary to carefully fulfil our agreements. For example, we also agreed that countries that did not cut production on time would receive an extension of the compensation period until the end of July,” the Deputy Prime Minister stressed. In February 2021, Russia executed the transaction at slightly above 100 percent.
According to Alexander Novak, oil demand in Russia is recovering in parallel with the improvement in the overall situation regarding the pandemic.
“Vaccination is actively underway in Russia; many strict prohibitive measures have been lifted; population mobility is increasing; and demand for fuel is higher than last spring. It is very important for us to increase production due to the seasonality of demand; we need to increase the volume of oil refining to ensure a stable demand for oil products in Russia. If in the future OPEC + countries increase production when demand recovers, we, for our part, will join this schedule. For now, we will restore production at a faster pace,” the minister explained.
According to the Deputy Prime Minister, increasing oil production will also affect the amount of tax allocated to Russian regions and provide work for oil companies’ subcontractors.