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OPEC+ is widely expected to continue raising its overall production quota by 400,000 barrels per day (bpd) per the plan from last summer, despite the surging oil prices over the Russian invasion of Ukraine, a Bloomberg survey of 18 analysts and traders showed on Tuesday.
The OPEC+ group—led by Saudi Arabia and Russia—is meeting on Wednesday to discuss production for the month of April, while oil prices have jumped to over $100 per barrel and the market is apprehensive that it could soon have to go without at least some Russian barrels.
Moreover, OPEC and OPEC+ have not been pumping as much as the OPEC+ pact calls for, essentially tightening the market and distorting analyst assumptions about market balances. Estimates in the International Energy Agency’s monthly oil market report for February showed that the gap between OPEC+ production and its target levels surged to as much as 900,000 bpd in January.
Despite $100 oil and the Russian invasion of Ukraine, the OPEC+ alliance is set to rubberstamp another 400,000 bpd increase in monthly production targets next week, several OPEC+ sources told Reuters last week. The Russian invasion of Ukraine—the move that triggered oil’s jump to $100—hasn’t changed the dynamics in the OPEC+ group, sources at the alliance told Reuters on Friday.
In the Bloomberg survey, only one of 18 experts polled expects OPEC+ to decide to add more than 400,000 bpd to its production quotas for April.
Russia’s war in Ukraine hasn’t affected the OPEC+ agreement, two sources at the group told Reuters on Tuesday, and also said they expect the alliance to stick to its monthly increases.
On Tuesday, Russian President Vladimir Putin and Abu Dhabi’s Crown Prince Mohammed bin Zayed, the de facto ruler of the United Arab Emirates (UAE), discussed the oil market and “supporting stability in the global energy market,” according to a statement from the Kremlin cited by Bloomberg.
The UAE—a U.S. ally—abstained last week from voting a resolution of the United Nations to condemn the Russian invasion of Ukraine. The other two countries which abstained were China and India, while Russia vetoed the resolution.
