The Organization of Petroleum Exporting Countries (OPEC) is headed by Secretary General Haitham Al Ghais, who said on August 18 that the OPEC+ oil production deal wants to keep Russia part of the alliance beyond 2022.
"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.
Oil production has gradually increased in Russia in the wake of Western sanctions, and Asian buyers have boosted sales. Forecasts for output and exports by Moscow have increased until the close of 2025.
Russia, along with OPEC and its allies, has cooperated closely on oil production policy in the face of Western-imposed sanctions on Russia following the 'special military operation' in Ukraine which began in February. The West, led by the US-NATO collusion, has used oil as a political weapon.
On September 5, a reduction in global crude oil output by 100,000 b/d in October was agreed upon by OPEC+ and its Russian allies, which was characterized by the Saudi-led cartel as a proactive move to stabilize the market and aimed at stopping a slide in oil prices.
This marks the first cut in production in more than a year by OPEC+ and its 23-member alliance, but only amounts to 0.1 % of global demand. The last cut was huge in the face of crashing oil prices due to the COVID-19 pandemic.
On September 2, the Group of Seven (G7) industrialized powers said it would put a price cap on Russian oil in December. The G7 is attempting to change the dynamic of oil prices by forming a buyers' alliance.
Dmitry Peskov, the spokesperson for the Kremlin, threatened Russia would retaliate if the G7 imposed any price cap.
"Any actions to impose a price cap will lead to a deficit on (initiating countries') own markets and will increase price volatility," Russia's Energy Minister Nikolay Shulginov said on the sidelines of the forum in Vladivostok.
In response to the threatened price cap to begin on December 5 and February 5, 2023, Russia will increase its shipments of oil to Asia.
Randy Ollenberger, a BMO Capital Markets analyst, doubted whether an oil price cap would damage Russia in financing its Ukraine operations. Sanctions imposed on Russia to date "have proved to be ineffective, and Russia has maintained crude oil and product exports at higher levels than anticipated, which has translated to record cash inflows," he said.
Analysts at Goldman Sachs feel bullish on oil prices while forecasting an average oil price of $125/bbl Brent in 2023.
Modest production increases under OPEC+ began last year as market conditions began to bounce back. In a market reaction to events in Ukraine, prices surged to almost $140 a barrel but recovered to about $95 as fear abounded on a potential economic slowdown in the West.
Another factor pulling down oil prices is the Iran nuclear deal negotiations which if reached would pose a boost in supply as it returns to the market. Saudi Arabia and the oil-rich Gulf Arab monarchies see Iran as a threat, not only to the price of oil and do not want Iran to have nuclear weapons.
OPEC is a Saudi-led cartel, and Saudi Arabia had enjoyed a very close relationship with the US under the President Trump administration. However, Trump was stymied by the Russian-Saudi coordination to limit oil production. Trump wanted to use US security relations with the Gulf allies to insist they pump more oil into the market.
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