Oil prices jump over $3 per barrel on prospect of OPEC+ supply cut

STAVANGER: Russia’s oil output has exceeded expectations in the wake of the war in Ukraine but Moscow will find it increasingly difficult to uphold production as Western sanctions begin to bite, the head of the International Energy Agency said on Monday.

“In the absence of (Western) companies, in the absence of the technology providers, in the absence of service companies, it will be much harder for Russia to maintain the production,” IEA chief Fatih Birol told Reuters.

Russian domestic demand has so far remained robust, and the country also offers large discounts to non-European buyers, Birol said on the sidelines of a conference in Stavanger in southern Norway.

Nations that are members of the International Energy Agency could meanwhile release more oil from strategic petroleum reserves if they find it necessary when the current scheme expires in November, he added.

“We still have substantial amount of stocks at our disposal,” Birol said.

“If our member countries believe that as a result of the supply disruption there is a need to make a stock release, I am sure (they) will consider (it) and it is not off the table.”

Birol earlier said Russia is likely to ramp up gas flaring in the coming months as the country’s storages fill up.

He said trust in Russia as an energy supplier had been eroded around the world following the invasion of Ukraine and its cuts to gas exports, and that the loss of Europe as a partner would hurt Moscow.

“Russia is not winning the energy battle here,” Birol said during a question and answer session at the conference.

The upcoming winter season will be a test of Europe’s solidarity, and if the continent fails when tested, the impact may be felt “beyond this energy crisis,” Birol said.