Oil prices are nowhere near their peak as Chinese demand hasn't fully returned yet, says top OPEC member

• China's economy hasn't fully reopened from COVID lockdowns, meaning oil prices are far from their peak, said the UAE's energy minister.
• "With the pace of consumption we have, we are nowhere near the peak because China is not back yet," Suhail Al-Mazrouei said.

Oil prices still have more room to climb as China's economy hasn't yet fully reopened from lingering COVID policies, according to the OPEC member United Arab Emirates.

China has already begun gradually loosening lockdowns, and state-run TV said Wednesday that those curbs would be eased further. Brent crude rose 1.2% to $122 a barrel.

"With the pace of consumption we have, we are nowhere near the peak because China is not back yet," UAE Energy Minister Suhail Al-Mazrouei said Wednesday at a conference in Jordan. "China will come with more consumption."

As demand ramps up further, OPEC and its partners, known collectively as OPEC+, will not be able to provide enough supply unless there's more investment in production globally, he warned.

While OPEC+ will boost output at a slightly faster pace this summer, the increase amounts to just 0.4% of global demand for July and August, according to Bloomberg, with the gap between demand and supply remaining wide.

"We're lagging by almost 2.6 million barrels a day, and that's a lot," Al Mazrouei said. "The situation is not very encouraging when it comes to the quantities that we can bring."

And should Russian supplies be taken completely off the market, oil prices could still surpass "unseen" levels, he added.

Meanwhile, the Energy Information Administration said in its Tuesday report that Russia's oil output could fall by almost one-fifth by the end of next year once Europe imposes a proposed ban on imports in response to the war in Ukraine. That would mean a loss of about 2 million barrels per day in the global markets.

"The possibility that these sanctions or other potential future sanctions reduce Russia's oil production by more than expected creates upward risks for crude oil prices during the forecast period," the EIA said.