VIENNA—Russia on Saturday threw its support behind Saudi Arabia’s plan to ramp up global oil production in the face of higher prices, after more than a year of holding back output in coordination with OPEC.
Russian Energy Minister Alexander Novak said his country backed a plan by the Organization of the Petroleum Exporting Countries to raise crude production by a nominal one million barrels a day starting next month. Though, the actual increase is expected to be around 600,000 barrels a day, according to people familiar with the matter, due to some producers being unable to increase output.
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That’s far lower than the 1.5 million barrel a day increase Russia had been targeting ahead of a series of OPEC-led meetings in Vienna this week.
OPEC and 10 producers outside the oil-cartel—including Russia—have been holding back oil output by around 1.8 million barrels a day since the start of last year in an effort to rein in a supply glut that had weighed on prices since late 2014. But as a result deeper cuts from countries like Saudi Arabia—the de-facto head of OPEC—and production outages in other OPEC countries, compliance with the deal has exceeded the planned quotas, rising to around 150%.
Novak said that rising oil prices—Brent crude LCOQ8, +3.39%[2] breached the $80 a barrel threshold last month for the first time in over three years—reflect a clearing of a global inventory overhang and the re-balancing of the oil market CLQ8, +5.71%[3] .
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Saudi Arabia’s oil minister, Khalid al-Falih said Saturday the release of additional barrels on the market would be gradual, but that his country would begin to sell more oil at the start of July.
An expanded version of this report appears on WSJ.com[5].
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