Sergey Kondratiev, Deputy Head of the Economic Department of the Institute for Energy and Finance, commented to Kommersant FM on oil production by the OPEC+ countries.
In the current situation, the next OPEC+ meeting, scheduled for August 3, will be of great importance. However, it is unlikely that oil exporters will agree to increase production volumes as a result of it, Sergey Kondratyev says:
“The United Arab Emirates has some significant free oil production capacity that they can use quickly, it is about 1 million barrels per day, and Iran.
The UAE and Saudi Arabia are in a similar position: they want to make as much money from the oil market as possible, and in this regard they would not like to allow the destruction of demand, which is so often mentioned. In some critical situations, I think they would be ready to increase production, but the current level of cost for Saudi Arabia and the United Arab Emirates is beneficial, and Iran is under the US sanctions, and so far the United States has not been able to reach any agreements with it on this matter.
The next meeting of the OPEC+ countries will be technical, where already existing production commitments will be confirmed. Some additional agreements may be adopted in terms of intervention, that is, perhaps the same Saudi Arabia and the United Arab Emirates will be allowed to sell some volumes from oil storage facilities on the market simply to stabilize the situation. If we talk about other parties to the agreement, according to the historical track of recent months, we see that it was no longer very easy for them to comply with production increase quotas.”
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