Global oil deficit seen at 1 million bpd, Russia's deputy prime minister Alexander Novak says

The global oil deficit is now seen at about 1 million barrels per day (bpd), Russia's deputy prime minister Alexander Novak said on Wednesday, days before the OPEC+ top negotiators are expected to meet.

The Organization of the Petroleum Exporting Countries and its allies, including Russia, a group known as OPEC+, is bringing back 2.1 million bpd of oil production through July, easing cuts to 5.8 million bpd. Their next meeting is set for June 1.

Any increase of oil production by Iran if indirect talks between Washington and Tehran lead to a lifting of sanctions, can potentially add between 1 million to 2 million bpd on top of the gradual rise OPEC+ supply, analysts estimate.


"We have always kept in mind a return of Iranian barrels," Novak told reporters on Wednesday. "We need to consider this... We will jointly calculate the (supply and demand) balance."

Iran's government spokesman Ali Rabiei said he was optimistic Tehran would reach agreement soon, although Iran's top negotiator said serious issues remained.

Brent crude prices were broadly steady at about $68.62 on Wednesday, after falling to below $65 a barrel last week on the possibility of a return of Iranian barrels.

"OPEC+ is likely to step up its production ... from May to July, yet this will presumably happen in line with the recovery of demand," Commerzbank said in a note.

The bank highlighted that coronavirus infection numbers in India and other countries were falling and mobility restrictions were being lifted around the world.

Citi expected an initial deal for an additional 500,000 bpd of Iranian oil to come back to markets in July at the earliest.

The bank also expected strong summer demand, "with markets tight enough to warrant mid-$70 a barrel," it said.