OPEC and its allies say they plan to hold oil production steady even as the war in Ukraine roils global markets and threatens global supplies.
“We won’t add resources if the market is balanced, and the resources are in the market,” United Arab Emirates (UAE) Energy Minister Suhail Al-Mazrouei said at a conference in Dubai.
Analysts expect the Organization of Petroleum Exporting Countries and its partners (OPEC+) to stick to their current plan and ratify only a modest supply increase when they meet on March 31.
The 23-nation coalition, led by Saudi Arabia, has so far rebuffed pressure to fill in for Russian supplies, which have been shunned by some buyers over the invasion of Ukraine. Riyadh and Abu Dhabi are eager to preserve ties with Moscow, indicating that they see no shortage even as Russian exports slump by a quarter and global prices for crude oil remain above $100 U.S. a barrel.
If no alterations are made, OPEC+ will ratify an increase of 430,000 barrels a day that had been previously scheduled for May. With many members struggling to fulfill their planned increases over the past few months and global demand bouncing back from the pandemic, that decision may cause markets to tighten further, exacerbating the inflationary pressure that’s hitting the world economy.
The global oil market has seen a divided response to Russia’s attack on Ukraine. Major oil companies are winding down oil purchases from Russia amid widespread condemnation of the invasion.
However, China’s oil refiners are purchasing cheap Russian crude oil as the nation’s supply continues to seep into the market. India has also been buying Russian oil.
Brent crude oil, the international benchmark, surged to a 13-year high of $139 U.S. a barrel earlier this month, sparking the inflationary surge that’s inflicting a cost-of-living crisis on millions of consumers worldwide.
