The global market may need a year or more to balance out in case of a decline in oil supply, while demand, hurt by the coronavirus pandemic, should be watched, Russian Deputy Energy Minister Pavel Sorokin said on Friday, according to Reuters.
Earlier this month, Sorokin told the news agency he expected to see the first signs of lower oil production at costly projects worldwide in 4-6 months.
“The market may balance out quite quickly, but not in a month or two; that will still take a year or more,” he told the Valdai discussion forum, an economic conference which was conducted online on Friday.
He also said oil output in the United States, the world’s largest producer, could fall by 1.5 million barrels per day this year with the oil price at $30-$35 per barrel.
Prices are down nearly two thirds this year following the collapse of talks earlier this month between the Organization of the Petroleum Exporting Countries (OPEC) and other leading oil producers including Russia.
Sorokin said on Friday that OPEC and the other countries, a group known as the OPEC+, have still been in contact. He reiterated that OPEC+ cannot reduce oil production alone, hinting that the United States should also join the cuts.
Kirill Dmitriev, head of Russia’s sovereign wealth fund RDIF, also told Reuters earlier on Friday that a new OPEC+ deal to balance oil markets might be possible if other countries join in.