Russia will remain part of the OPEC+ oil deal after 2022, OPEC Secretary General Haitham al-Ghais told Reuters.
He noted that despite measures taken to cut Russian oil supplies by the end of the year, Russia is likely to remain part of the cooperation charter signed between OPEC+ members in July 2019.
OPEC+ is an alliance of the Organization of the Petroleum Exporting Countries (OPEC) and allies.
"We would love to extend the deal with Russia and the other non-OPEC producers ... it's very hard for me to imagine that the deal will not continue," Al-Ghais said.
"This is a long-term relationship that encompasses broader and more comprehensive forms of communication and cooperation between 23 countries. It's not just in terms of production adjustment," he said.
Replacing Russian oil is "not an easy task," he said, and a decline in Russian production would have "severe, severe implications for consumers." "Whatever measures may take place in the future ... buyers and sellers can adjust and they can always find ways and mean to reroute and redirect trade flows," Al-Ghais said.
Russia began gradually increasing its oil production after sanctions-related restrictions and as Asian buyers increased purchases, causing the country to raise its production and export forecasts through the end of 2025.
Haitham al-Ghais said that oh demand for oil in the physical market has been strong, fears of a slowdown in China are exaggerated, and demand is likely to find support from jet fuel as people travel more.
"There are a lot of concerns," Al Ghais said. "There's a lot of speculation and anxiety, and that's what's mostly driving prices down...Whereas in the physical market, we see things very differently. Demand is still solid. We remain very optimistic about demand and very optimistic about demand for the rest of this year."
Accordig to Al-Ghais, the concerns about China are really exaggerate, who worked in China for four years early in his career. China continues to be a phenomenal place for economic growth.
Ahead of the next OPEC+ meeting on Sept. 5, Al-Ghais said it's premature to say what decision OPEC+ will make, although he is positive about the prospects for next year. It all depends on how events unfold. But they remain optimistic and should see a slowdown in demand growth in 2023, but it shouldn't be worse than what it has been in the past.
