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OPEC+ meets Thursday to decide January cuts; pre-pandemic oil output level expected to be reached in May

Some members of OPEC+ led by Russia and Saudi Arabia have been struggling with reaching their quotas in recent months.

By Tsvetana Paraskova for Oilprice.com – All Russian oil companies have confirmed they can raise production to the levels before the pandemic if the alliance chooses to proceed with monthly increases in output, Russian Deputy Prime Minister Alexander Novak said on Monday.

“I don’t see any problem, all our companies confirm that they are ready to raise production to the levels from before the cuts,” Novak said on the sidelines of the Russian-Chinese Energy Business Forum, as quoted by TASS news agency.

If OPEC+ were to raise production by 400,000 barrels per day (bpd) each month, Russia should reach its oil production levels from before the pandemic by May, according to Novak.

Some members of the alliance led by Russia and Saudi Arabia have been struggling with reaching their quotas in recent months, so OPEC+ has been actually adding less than the per-agreement increase of 400,000 bpd each month. Most of the underachievers are from OPEC, especially African members Angola and Nigeria, analysts and tanker-tracking services have found in recent weeks.

OPEC+ ministers are meeting on Thursday to decide how to proceed with the cuts in January. The meeting comes amid new COVID travel restrictions imposed by many countries due to the new Omicron variant of the virus found in South Africa earlier this month.

Some analysts think that OPEC+ will decide to pause the monthly production hikes, at least in January, due to the threat to oil demand from the new variant and a likely surplus on the oil market early next year.

OPEC+ will discuss potential measures at the meeting, Novak said at the forum, but noted that Russia currently doesn’t see the need for urgent measures.

“We don’t see such a need, we will carefully monitor the situation, but there is no need to rush to hasty decisions,” Novak, Russia’s chief oil policy negotiator at OPEC+, said.