OPEC+ production quotas have played a larger role in reducing Russian energy exports than have Western sanctions against the country, Goldman Sachs commodity analysts said on Tuesday.

U.S. and Russian officials met in Saudi Arabia on Tuesday to begin talks aimed at ending the war between Russia and Ukraine, but Goldman analysts said a peace deal and the potential easing of sanctions against Russia will not lead to a significant increase in the country's oil flows.

Instead, the bank said OPEC+'s 9 million b/d quota on Russian crude output is the major restriction on barrels.

The analysts pointed to improved Russian compliance with output curbs along with better adherence by the organization's other producers.

Goldman believes the improved compliance may lead OPEC+ to delay a move to bring more crude to the market.

The producers group is planning to start unwinding early output cuts starting April 1, but Goldman said it believes that won't happen until July.

The bank also estimated net global oil supply rose by 600,000 b/d last week amid a drop in European demand, small increases in Canadian and Libyan output that likely offset a drop in Russian production and only a small increase in Chinese demand.

Goldman analysts said global oil inventories have continued to fall and put "total commercial stocks" at their lowest level since June 2022. Crude oil prices that month spiked a 10-year high of over $123/bbl and pushed U.S. retail gasoline prices briefly above $5/gal.

Goldman said its measurements so far this year point to global demand slightly exceeding supply.

The bank also warned that positioning has returned to an unfavorable mode for futures. The long skew in crude oil contracts has fallen to the 20th percentile, possibly because of what the bank said is an inappropriate concern that a peace deal could bring much more Russian oil to market. With just seven full days of trading left in February, the bank sees Brent rebounding to $79/bbl.

This content was created by Oil Price Information Service, which is operated by Dow Jones & Co. OPIS is run independently from Dow Jones Newswires and The Wall Street Journal.

--Reporting by Tom Kloza, tkloza@opisnet.com; Editing by Jeff Barber, jbarber@opisnet.com

(END) Dow Jones Newswires

February 19, 2025 11:23 ET (16:23 GMT)

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