Russia's Oil Output Unlikely to Rise Despite Ukraine Ceasefire, Sanctions Easing
Goldman Sachs analysts anticipate minimal impact on Russia's oil production from a potential Ukraine ceasefire and subsequent sanctions relief.
Despite potential talks between the US and Russia to resolve the conflict, Goldman Sachs believes that Russia's oil production remains constrained by OPEC+ output targets (9.0 million barrels per day) rather than current sanctions, which primarily affect export destinations.
OPEC+, a global oil cartel comprising members of the Organization of the Petroleum Exporting Countries (OPEC) and its allies, pumps approximately half of the world's oil.
Goldman Sachs anticipates that OPEC+ will postpone its planned gradual oil output increase from April to July, citing improved compliance with production targets and ongoing uncertainty regarding US policy.
OPEC+ had previously agreed to commence production increases in April, but a December adjustment extended the latest round of cuts through Q1 2025 due to weak demand and rising external supply.
Despite Russia's status as a significant global oil supplier, Goldman Sachs maintains a conservative outlook, forecasting minimal supply growth.
The bank anticipates that Brent crude oil prices may reach $79 per barrel later this month, driven by potential market sentiment and valuation adjustments. Brent crude was trading around $76 per barrel as of Wednesday, 0537 GMT.