Russia benefits from increasing oil production, exports under current price conditions - deputy PM

MOSCOW. Feb 25 (Interfax) - Russia benefits from increasing oil production and its export under current price conditions, Deputy Prime Minister Alexander Novak told journalists when asked a corresponding question.

"Absolutely. We are a country that extracts oil not only for the domestic market and refining, but also for exports. This provides additional income to the budget and ensures the development of the industry and companies," he said.

When asked whether he sees potential for OPEC+ countries to increase oil production from April, Novak said: "I won't get ahead of events. We have discussions on plans for April this coming Sunday."

Bloomberg quoted sources as saying some OPEC+ delegates expect the eight countries that have been voluntarily cutting output, namely Saudi Arabia, Russia, Iraq, Kuwait, the UAE, Algeria, Oman and Kazakhstan, will agree to resume modest production increases in April. Since October last year, OPEC+ countries have been putting barrels, previously cut at a rate of 1.65 million bpd, back on the market at a rate of 137,000 bpd per month. However, the quota increase was suspended for the first quarter due to seasonally low demand.

An OPEC+ meeting is scheduled for March 1 to discuss plans for April.

Bloomberg reported, citing three sources, that the group had not yet decided on its course of action. The market outlook is unclear due to the risk of conflict between the U.S. and Iran.

Reuters reported, quoting sources, that OPEC+ would "likely consider raising its oil output by 137,000 barrels per day for April" as the group prepares for peak summer demand and tensions between the U.S. and OPEC member Iran boost prices. Also, Saudi Arabia has activated a plan for a short-term oil output and export surge in case a U.S. strike on Iran disrupts oil flows from the Middle East, two sources familiar with the Saudi plan told the agency.

But relaxing quotas does not always translate into an actual increase in output: OPEC+ production in both December and January was 0.6 million-0.8 million bpd below the planned level for all parties to the agreement. Russia, for example, produced approximately 300,000 bpd below its permitted level.

Several countries are supposed to compensate for previously uncut production volumes, meaning they must produce less than the permitted level. Kazakhstan and Iraq account for the bulk of the compensation volumes in the first half of this year,