Without OPEC+ Deal Oil Would Cost $10-20 Today, Russian Energy Minister Says

Earlier this year, analysts told the Wall Street Journal (WSJ) that following this year's huge drop, oil prices still have the chance to rebound to above $100 per barrel, potentially reaching $150 per barrel by 2025.

Russian Energy Minister Alexander Novak stated on Wednesday that without the recent OPEC+ deal, oil would cost $10-20 per barrel today.

The senior official expressed hope that there will be no second wave of coronavirus and that oil demand will soon get back on track.

Speaking further, the minister stated investment in the Russian oil industry will decrease by 20 percent in 2020 compared to 2019.

"Last year, the investment was about 1.4 trillion [$18,9Bln] this year, we are seeing it decrease and it may decrease even further although not by much. The Energy Ministry is expecting an average decrease of up to 20 percent," Novak said.

Oil output will reduce by 10 percent to about 510 tonnes. In August-December, there will be a 13.8 percent decrease. compared to plan, Novak said, adding that in May and June, the decrease amounted to 19 percent.

An unprecedented drop in oil demand amid global coronavirus lockdowns, coupled with the subsequent price war between OPEC and non-OPEC countries, has resulted in a deep crisis for the energy market.

On 12 April, 24 OPEC+ nations concluded a deal that obliged the signatories to reduce crude production by 9.7 million barrels per day in May and June. Thereafter, production will be cut by 7.7 million barrels per day until the end of 2020, and by 5.8 million barrels daily from January 2021 until April 2022.