Global oil prices may rise to as high as $120 (€106) by the middle of next year as the ability of OPEC+ to meet demand is at risk from under-investments and sanctions, according to a Rosneft PJSC executive.
“Today OPEC+ countries can’t increase production to the extent necessary to meet demand,” Otabek Karimov, the Russian company’s vice president for commerce and logistics, said at a conference.
“As a result, there is a very serious deficit of energy resources in the whole world today. Naturally, this cannot but affect the price.”
Crude has soared almost 60pc to above $82 a barrel this year as the recovery from the pandemic boosts demand while OPEC+ and its allies are only gradually boosting supply.
Russia’s President Vladimir Putin said last month that $100 oil is “quite possible,” a view shared by Eni SpA and Trafigura Group.
Bank of America thinks it could go even higher to $120 by June.
Mr Karimov’s comments come a day after senior officials from Russia, Saudi Arabia and the United Arab Emirates – all members of OPEC+ – said they expect the global market to become oversupplied soon, which could push prices lower and justifies the group’s cautious approach.
The International Energy Agency expects the price rally is coming to an end.
While OPEC+ is digging in its heels on monthly hikes of 400,000 barrels a day, actual increases are falling short with members such as Nigeria and Angola struggling to raise supply amid a lack of investments.
Russia though, produced above its quota last month, according to the International Energy Agency.
Rosneft, Russia’s largest oil producer, has been complying with output restrictions under the agreement, but has historically opposed Russia’s involvement in the OPEC+ pact.
It said it plans to raise output once the agreement ends in 2022, and is targeting about 600,000 barrels a day, from its future Vostok Oil project as soon as in 2024.