Russian Energy Minister Alexander Novak, for his part, said Thursday that the increase in shale production was expected. And, had the group of oil producers not agreed to cut supply, they “would have been even more greatly affected,” he said.
Russia, along with OPEC and other non-OPEC countries, agreed on Thursday to extend productions cuts until the end of 2018.
The deal to cut oil output by 1.8 million barrels a day was adopted last winter by the 14-member OPEC cartel, Russia and nine other global producers. The initial agreement was due to end in March 2018, having already been extended once.
But global oil output is not just up to those countries: American shale drillers increased their output every month this year, with production expected to reach 6.17 million barrels per day in December, figures from the Energy Information Administration showed.
The increase in U.S. shale production and exports is seen as a threat to the pact’s effort to re-balance the market. Rising oil prices, largely a result of the group’s supply cut, were thought to have encouraged U.S. shale producers to come back online.
Asked by CNBC about that American market increase, Novak didn’t mince his words: “I am asked this question every interview and I have already answered it many times. This is not news for us. For some reason when people ask this question they seem to believe that we didn’t think that shale oil would grow.”
“Either you underestimate us or you think we lack professionalism. I think that if you think we are professional you need to understand that we are including all this in our calculations,” he added.
Earlier this month, OPEC forecast in a report that shale output will reach its peak in 2025 and then decline rapidly after that – turning the tables in favor of other oil producers.
Novak said the rise in shale production was “in theory” within expectations. He added that he believes the oil market could re-balance in the third quarter of 2018, even though “this has not been precisely predicted on hard proof.”
Ahead of the pact’s meeting in Vienna to decide on the extension, Russia was seen as a wild card. Some market watchers were worried that the country would not agree to extend the production cuts to all of 2018.
Novak said Russia would not have entered the pact if it was not beneficial to the country.
“It’s clear that in any event, this process will not go on forever and that at some time it will all come to an end. Therefore, we need to prepare ourselves for this. Today, we understand that we need to see this process to its conclusion,” he said.
— Holly Ellyatt, Tom DiChristopher and Steve Sedgwick contributed to this article.
Russia wasn't surprised by US shale spike, energy minister says