Russia signals OPEC and allies could raise oil output from June

Kirill Dmitriev was the first Russian official to predict a deal with OPEC in 2016. (File photo: Reuters)

One of the key Russian officials to foster a supply pact with OPEC, Kirill Dmitriev, signaled on Monday that Russia wanted to raise oil output when it meets with OPEC in June because of improving market conditions and falling stockpiles.

Dmitriev, head of the Russian state’s direct investment fund, was the first Russian official to predict a deal with OPEC in 2016 and since then has become a key defender of the pact despite pressure from domestic oil firms to drop the agreement.

Dmitriev, an envoy for Moscow in the Middle East in general and Saudi Arabia in particular, had in recent months said it was still too early to terminate output cuts, echoing the position of Saudi Arabia.

But in an apparent change of position, Dmitriev said on Monday supply cuts may not be required after June.

“It is quite possible that given the improving market situation and falling stocks, (OPEC and its allies) could decide in June this year to abandon supply cuts and subsequently increase output,” Dmitriev told a conference in Moscow.

“This decision will not mean the end of the deal, but a confirmation that participants continue their coordinating efforts when it is important not only to cut but to increase output depending on market conditions,” he told the conference.

Dmitriev and energy minister Alexander Novak have come under increased pressure over the past year from firms such as Rosneft, whose boss Igor Sechin, a close ally of President Vladimir Putin, has said Russia should abandon output cuts.

Sechin is arguing that Russia is losing market share to the United States, which is not participating in output cuts and hence has been boosting output to record levels of some 12 million barrels per day.

Last Update: Wednesday, 20 May 2020 KSA 14:04 - GMT 11:04