The OPEC+ agreement for higher quotas in July and August and continued release of oil from the US government's Strategic Petroleum Reserve may compensate for the loss of Russian crude, the head of Vitol Asia said, as the European Union undertakes a phased ban on seaborne oil imports from Moscow.
"Crude output of Russia is still level pegging with what it was and it's products that's been hit," Mike Muller told the Gulf Intelligence daily energy podcast on June 5. "Products look continue to be hit but harder and that production shortfall can be made up by OPEC+ accelerated increases plus of course we must not forget that SPR release is ongoing."
OPEC+ ministers agreed on June 2 to increase their quotas by 648,000 b/d for July and another 648,000 b/d for August – about 50% higher than the typical 432,000 b/d monthly raises that it has recently implemented.
Calling the OPEC+ decision "a surprise," Muller said the group responded to pressure from the US and other consumers to boost its output and tame gasoline prices.
"It's just a realization that oil prices remain a little more resilient than some would have forecast, and they are giving a little signal in response to strong requests from the Americans to keep prices under control and not add fuel to fire about escalating costs to Europe," Muller said.
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