OPEC+ to Raise Oil Production 432,000 Bpd

OPEC+ to Raise Oil Production 432,000 Bpd

The Organisation of Petroleum Exporting Countries and allies (OPEC+) is turning on the oil tap only moderately. It said production would be increased by another 432,000 barrels per day in May, the alliance of about 20 countries was announced after an online ministerial meeting on Thursday.

The oil cartel, dominated by Saudi Arabia and Russia, is thus sticking to the production increase of the past months in spite of the war in Ukraine. The countries justified their rather cautious step by saying that geopolitical reasons were responsible for the recent high oil price, so hardly any effects on the price of heating oil and petrol are to be expected.

Oil prices had fallen significantly from a high level in early trading on Thursday. In the market, reference was made to speculation that the U.S. and other industrialised nations could again release oil from their strategic reserves.

A barrel (159 litres) of North Sea Brent cost 107.89 dollars in the morning which was 5.56 dollars less than the previous day. The price of a barrel of U.S. West Texas Intermediate (WTI) fell by 6.96 dollars to 100.86 dollars.

So far, the oil alliance has shown itself to be united in spite of the Russian war on Ukraine.

According to the energy experts at Commerzbank, the strategy of a monthly adjustment of capacities decided in the summer of 2021 would have allowed a more significant expansion of production in May.

At that time, it had been agreed to allow the five largest producers in the group, Saudi Arabia, Russia, the United Arab Emirates, Iraq and Kuwait a total of 1.6 million barrels per day of additional production from May 2022.

Saudi Arabia alone would account for 500,000 barrels of this, experts say. However, this option was not taken. The global demand for oil amounts to almost 100 million barrels per day, of which OPEC+ supplies some 45 per cent.

Speculation surrounding the further release of additional strategic oil reserves is fueling the suspicion that the nuclear talks with Iran were not yet close to a conclusion.

This is because the lifting of sanctions imposed on the Islamic Republic associated with an agreement would also allow Tehran to increase its oil exports. The next online meeting of the 23-member OPEC+ alliance has been scheduled for May 5. #OPEC+ to Raise Oil Production 432,000 bpd

READ: OPEC Forecasts 6% Jump in Global Oil Demand