Russia is the second largest global oil producer after Saudi Arabia. Russia's oil production still hasn't recovered to pre-pandemic levels after its steep drop in 2020. It's no secret that demand for oil, as part of the global recovery, is strong. So strong that ramping up production is proving difficult, even for OPEC+'s biggest producers.
Russia's combined crude and condensate production
Within the OPEC+ cartel, only Saudi Arabia and the UAE have the capacity to ramp up production to pre-Covid levels. Whereas, Russia is expected to only be able to meet half of its expected output over the next six months. For investors, economists and even the Biden administration, that's a problem. It means less relative supply in the face of ongoing demand. In other words, higher oil prices are inevitable, which could further eat into disposable consumer income and ultimately company earnings.
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