Russia and Saudi Arabia signalled on Monday there was no need for Opec+ to race to adjust oil output policy this week, as crude prices rebounded from last week’s slide with the worst fears about the impact of the Omicron variant on demand easing.
Oil prices rebounded on Monday after tumbling on Friday by more than 10% alongside other financial markets in their largest one-day drop since April 2020 as the new variant added to concerns about a possible supply glut.
Russian Deputy Prime Minister Alexander Novak was quoted as saying on Monday that he sees no need for urgent action on the oil market over Omicron, downplaying the possibility of changes to an Opec+ oil supply deal this week.
Saudi Energy Minister Prince Abdulaziz bin Salman al-Saud said on Monday he was not worried about the Omicron, Asharq Business reported, but he declined to comment on Opec+ plans.
Saudi Aramco CEO Amin Nasser said on Monday that oil markets had overreacted to the new variant, according to Al Arabiya TV.
The Organisation of the Petroleum Exporting Countries and others led by Russia, a group known as Opec+, hold online meetings this week to decide on oil production policy.
The group has been reducing its curbs on output by 400,000 barrels per day of oil per month as it winds down record cuts from last year, when it cut production by as much as 10mn bpd to address lower demand caused by lockdowns.
Opec+ has some 3.8mn bpd of cuts still in place and some analysts have suggested the group could pause its output increases.
“There is no need for hasty decisions,” Novak was quoted as saying by the Interfax news agency. His comments were confirmed by his spokesperson.
“We will additionally discuss with the Opec+ countries the market situation and if any measures are warranted,” Novak said, according to the spokesperson.
Before Friday’s crash, Opec had already predicted the market’s surplus would grow steeply after the United States and other major consumers decided to released oil stocks to help cool down prices.
The stocks release was decided after Opec+ resisted US calls to pump more oil to reduce oil prices.
Opec+ postponed two committee meetings from that were planned for Monday and Tuesday to later during the week to “buy time to review matters” surrounding the new variant, Prince Abdulaziz said.
“According to what is coming from the World Health Organisation there are exaggerations...but I believe that the decision we took will enable us to at least gain time to better study the matter even if with limited knowledge,” he added.
This week’s meeting will discuss January’s output.
Novak said Opec+ partners had not asked to renegotiate their current deal in response to Omicron.
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