With global economies and oil demand recovering, there is no point in extending oil output cuts led by the Organization of the Petroleum Exporting Countries (OPEC) and other producers, Kirill Dmitriev, head of Russia’s sovereign wealth fund RDIF, told RBC.
Producers are currently cutting output by a record 9.7 million barrels per day (bpd) – or 10% of global supply – after oil demand plunged by up to a third.
On Thursday, a panel of the OPEC+ group of producers left the door open for extending or easing those cuts from August, while pressing a number of countries, such as Iraq and Kazakhstan, to improve their compliance.
“We already see that economies have started to emerge from the coronavirus and markets are recovering, supporting oil demand, so there is no point to extend strict curbs for longer than a month (through July),” Dmitriev, one of Moscow’s top negotiators, told the RBC Daily newspaper in an interview.
Current plans call for the cuts to fall to 7.7 million bpd from August and stay at that level until December.