He said the recovery of oil demand in China following the COVID-19 pandemic was "probably lower" than analysts and experts had expected and he regarded the market as balanced. Novak said OPEC+ did not expect oil shortages on the global market after the production cuts, even though the International Energy Agency (IEA) said they risked exacerbating a supply deficit expected in the second half of the year. Separately, the Secretary General of the Organization of Petroleum Exporting Countries Haitham Al Ghais said on Thursday that the IEA should be "very careful about further undermining" oil industry investments, which producing countries say are vital for economic growth and depend on robust oil prices.
MOSCOW MAINTAINS OUTPUT DESPITE SANCTIONS
Following severe Western sanctions against Moscow over
Ukraine, Russia has maintained its oil production and exports by
increasing sales outside Europe, its traditional supply market
for oil and gas.
Novak said that Russia will this year divert to Asia 140
million tonnes of oil and oil products that previously would
have headed to Europe. He also said Russia will supply between
80 million tonnes and 90 million tonnes of oil and oil products
to the West in 2023.
Asked for his view on future oil price direction, Novak said
he couldn't "speak for god" and therefore was not able to
predict prices, which have been trading around $80 a barrel, far
below peaks of well over $100 last year. The market rallied following the OPEC+ announcement of
surprise cuts, but has weakened in response to market concerns
about recession and the impact that would have on demand.
Novak also said the difference between prices of Russian
Urals flagship oil blend and global benchmark Brent in the
Baltic is around $26-$27 per barrel.
The discount widened in December after Western nations
imposed a price cap, but has narrowed since mid-March.
(Reporting by Olesya Astakhova; writing by Vladimir Soldatkin;
Editing by Himani Sarkar, Bernadette Baum and Barbara Lewis)
