Russia joins OPEC pushback on U.S. calls for more oil output

ABU DHABI (Bloomberg) --Russia says there is no shortage of oil in the global market and there may even be a surplus from early next year, adding to the chorus of other OPEC+ members to push back against calls from the U.S. to raise output faster.

“Inventories have stopped drawing, which shows there is no deficit at the moment,” Russia’s Deputy Energy Minister Pavel Sorokin told Bloomberg TV Monday in an interview on the sidelines of the Adipec oil and gas conference.

The comments from Russia’s deputy energy minister echo rhetoric from other key OPEC+ members, Saudi Arabia and the United Arab Emirates, that indicate the alliance is in no rush to respond to calls from the White House to unleash crude supply faster. President Joe Biden, concerned by seven-year high gasoline prices and waning popularity at home, has called on the 23-nation group to supply more crude and bring pump prices down. President Biden is due to meet virtually with China’s President Xi, the world’s largest oil importer, later on Monday.

“Everybody is predicting a surplus of supply starting from the first or second quarter, it’s just a matter of timing by a few months,” Sorokin said. “We pretty much see the same picture.”

Benchmark Brent crude prices have risen almost 60% this year, as global consumption recovers from its pandemic-driven lull and OPEC+ continued its modest pace of production increases. At its latest meeting in early November, the Organization of Petroleum Exporting Countries and its allies agreed to continue only gradual planned production ramp-ups, adding another 400,000 barrels a day to combined output in December. However, a number of OPEC+ nations, including Nigeria and Angola, are struggling to meet their quotas due to under-investment in their upstream sectors.

Russia will be able to ramp up its oil output to pre-pandemic levels, of about 11.32 million barrels a day, as soon as the OPEC+ deal and the market’s needs allow, Sorokin said. The country produced an average 10.843 million barrels a day last month. While it’s difficult to assess Russia’s precise crude-only output, Bloomberg calculations show the nation may have produced some 120,000 barrels above its quota last month.