A potential ceasefire in Ukraine and the easing of sanctions on Russia are unlikely to significantly increase Russia’s oil exports, according to Goldman Sachs. The investment bank suggests that Russia’s oil production is more constrained by its OPEC+ production targets than by current sanctions.
Impact of OPEC+ Production Targets
Goldman Sachs stated that Russia’s crude oil production is limited by its OPEC+ target of 9.0 million barrels per day (mbpd). The bank emphasized that sanctions are influencing the destination of Russian oil exports but not the overall volume.
OPEC+, which includes the Organization of the Petroleum Exporting Countries, Russia, and other allies, produces about half of the world’s oil. The bank expects OPEC+ to delay its planned production increase to July, citing increased compliance with output targets by Russia and other producers, along with ongoing uncertainty surrounding U.S. policy.
OPEC+ Production Strategy
OPEC+ previously postponed its planned production ramp-up to April, extending its latest round of output cuts through Q1 2025 due to weak demand and rising non-OPEC supply.
Despite speculation about further delays, Russian Deputy Prime Minister Alexander Novak stated on Monday that OPEC+ producers are not considering postponements in the scheduled supply increases.
Market Outlook and Price Predictions
Goldman Sachs anticipates a potential recovery in market positioning and valuation, which could push Brent crude prices up to $79 per barrel later this month. As of 05:37 GMT on Wednesday, Brent crude was trading at around $76 per barrel.
Russia’s Influence on Global Oil Markets
As one of the world’s largest oil producers, Russia continues to wield significant influence over global oil markets and prices. The country’s production strategy and compliance with OPEC+ targets will remain key factors in shaping global oil supply and pricing dynamics.
