Russia's Novak sees demand fully restored in 2022, but warns of $200/b crude

London (Quantum Commodity Intelligence) - Russian deputy prime minister Alexander Novak expects global oil demand to return to pre-pandemic levels in 2022, reported Argus Media, quoting Novak on the sidelines of St Petersburg Economic Forum.

"In 2022, we will get back to that level (of demand) at which we were before the crisis," said Novak, but cautioned that market uncertainty persists and it was too early for the OPEC+ producer group to make any decisions on crude output policy beyond July.

Ministers from the OPEC+ group of oil producers agreed Tuesday to stick with the current policy of gradual output increases for June and July, but defer any decision on August production until a later date.

Novak was further quoted as saying that current oil prices reflect the existing balance between supply and demand and are unlikely to rise further in the short term.

"I don't think that prices will go up. There can be volatility in one or another direction, but I do not see any premise for that now," Novak told reporters.

Asked about the IEA's recent Net Zero by 2050 report that said all new investment in oil and gas needed to cease this year to meet UN climate goals, Novak warned that pressure to decarbonise the global energy system too quickly may create a situation where oil prices rise sharply.

"I cannot imagine that starting from tomorrow, investment in new projects stops. And what we will see then? Oil prices will grow to $200/b, maybe. We have to be more responsible when making such proposals," he said.