OPEC could double its control over the oil market, to between 70% and 80%, according to Lukoil's Vice President.
OPEC will win its increased share by default, Leonid Fedun, Vice President for the strategic development of Lukoil, told reporters on Monday, according to Russian media outlet Tass.
As climate policies continue to weigh on the oil markets, the oil market is expected to contract—a situation that will increase OPEC countries' share of the global oil market from 30% today to nearly 70-80%.
Fedun did not specify the timing of this achievement.
Lukoil's activities, however, will remain unaffected, according to the VP.
"In general, we do not see any restrictions on the activities of our company under any development scenario. Even with the radical IEA scenario where oil supplies will decrease by 30%, we see that OPEC will simply increase its market share, from today to about 70 -80% of the market will be controlled by OPEC."
The Kremin expressed optimism after the OPEC meeting on Sunday that adjusted the baseline production levels upwards for five countries, including Russia.
Under the new deal, Russia's baseline level will be adjusted to 11.5 million barrels per day starting in May of next year, according to an OPEC press release.
Baselines, however, aren't directly translatable to production.
Nevertheless, Russia's Deputy Prime Minister Alexander Novak remains optimistic that Russia's overall oil production will reach pre-Covid 19 levels by the time its baseline is adjusted, by May of next year, according to Upstream.
Novak sees Russia's production increasing to 154 million barrels (or 21 million tonnes) of oil between August of this year and May of next year.
Novak hopes that the upward adjustment of the baseline will reinvigorate the flow of investments pouring into Russia's oil and gas sector.
By Julianne Geiger for Oilprice.com
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The second reason is the excessive pressure on IOCs to divest of their oil and gas assets.
Russian NOCs such as Lukoil, Rosneft and Gazprom won’t be affected since they are partly owned by the government and have therefore access to the entire reserves of Russia.
Dr Mamdouh G Salameh
International Oil Economist
Visiting Professor of Energy Economics at ESCP Europe Business School, London