Head of Russia’s largest oil producer Rosneft Igor Sechin said on Saturday that the decision by the OPEC+ to speed up output increase now looked far-sighted and justified in the light of the confrontation between Israel and Iran.
OPEC+ crude output represents about 41% of global oil production. The group’s main objective is to regulate the supply of oil to the global market.
The Organization of the Petroleum Exporting Countries and its allies, led by Russia, in April agreed a bigger-than-expected output hike for May.
OPEC+ has since decided to continue with more than planned hikes.
“The decision taken by OPEC leaders to forcefully increase production looks very far-sighted today and, from the market’s point of view, justified, taking into account the interests of consumers in light of the uncertainty regarding the scale of the Iran-Israel conflict,” Sechin said.
Besides the 2.2 million bpd cut that the eight members started to unwind in April, OPEC+ has two other layers of cuts that are expected to remain in place until the end of 2026.
Oil prices had initially fallen in response to the OPEC+ decision to increase oil production, but the outbreak of an aerial war between Israel and Iran has so far been the main factor behind their return to around $75 per barrel, levels unseen since the start of the year.
Speaking at the St. Petersburg International Economic Forum, Sechin, a long-standing ally of Russian President Vladimir Putin, also said there will be no oil glut long-term despite the production rise due to low stockpile levels, though rising usage of electric vehicles in China might hit oil demand.
Putin said on Friday he shared OPEC’s assessment that demand for oil will remain high. He also said that oil prices had not risen significantly due to the conflict between Iran and Israel, and that there was no need for OPEC+ to intervene in oil markets.
