May 25 (UPI) -- Parties to an OPEC-led effort to trim a market surplus through production cuts may reverse course in the second half of the year, Russia's oil minister said.
The Organization of Petroleum Exporting Countries and a handful of non-member state producers are in the second year of an effort to erase a market surplus through production limits. OPEC agreed to cut production by 1.8 million barrels per day, while non-OPEC members agreed to 558,000 barrels per day.
Speaking from the sidelines of the St. Petersburg International Economic Forum, Russian Energy Minister Alexander Novak said there could be a gradual increase in output starting in the third quarter of the year.
"It is premature to talk about a specific figure," he was quoted as saying by Russian news agency Sputnik. "It must be carefully calculated."
Novak said earlier this week he was on the same page as his Saudi counterpart, Khalid al-Falih, when it comes to monitoring the situation on the global oil market. With Iran facing increased U.S. sanctions pressure and Venezuelan oil production at historic lows, the global oil market may be faced with a looming deficit.
"Today they [the reserve surplus] are around zero, some estimates even say that they are at the level of minus 20 million barrels," Novak said.
Word that OPEC members would ease up on compliance with the production deal helped crude oil prices pull away from the $80 per barrel threshold for Brent earlier this week. Oil prices early Friday were at one point down more than 2 percent.
Speaking at the same forum, Igor Sechin, the top executive at Russian oil producer Rosneft, said the downturn in oil prices might not last because of sanctions.
"The policy of sanctions and ultimatums applied to hydrocarbons markets will inevitably lead to a permanent 'sanctions premium' in the price," he was quoted by Russian news agency Tass as saying.
The price for Brent crude oil lurched toward $80 per barrel after U.S. President Donald Trump backed out of a U.N.-backed nuclear agreement with Iran on May 8. That deal lets Iranian oil flow in the global market and Washington set a 180-day clock ticking for Tehran's clients to find new supplies.
Rosneft reported first quarter revenue of $30.9 billion, up 0.8 percent from the fourth quarter and 22.1 percent higher than the first quarter 2017. It attributed the gain in large part to higher crude oil prices.
Sechin is one of the Russian oligarchs who faced personal and business U.S. sanctions stemming from the Russian annexation of Crimea from Ukraine in 2014.