Page 4 - MEOG Week 13 2022

MEOG COMMENTARY MEOG

OPEC+ kicks off

meeting with

focus on supplies

All eyes are on the cartel as it navigates the choppy waters of
oil price volatility and supply disruptions from its own members.

OPEC+ THE OPEC+ group meets in Vienna this week sold to Asian instead of European customers.
to decide on May production levels at a pivotal Prices have been driven up further as exports
point for oil markets. With consumers begging from Kazakhstan, the second-largest producer
WHAT: for more crude supplies to ease the current sup- on the non-OPEC side, are seen falling by around
This week’s meeting will ply/demand pinch, OPEC and its allies remain 320,000 bpd in April, according to the country’s
determine production in the driving seat as numerous members have energy ministry, as work is carried out to repair
quotas for May and will reasserted their commitment to output restraint. loading facilities at the port of Novorossiisk.
likely have oil price It appears unlikely that they will now throw However, the OPEC+ deal has aided the
ramifications. caution to the wind and deviate from plans to post-pandemic recovery among producer
increase production quotas by a combined nations and there has been little sign of a shift
WHY: 400,000 barrels per day (bpd); however, May is in policy. Indeed, UAE Energy Minister Suhail
There are plans to raise the month that renegotiated baselines come into Al-Mazrouei said: “We are experts in our field
the baseline levels for the effect, potentially adding a combined 1.6mn bpd and we have been doing it for a long time.”
OPEC+ quotas but with to target levels. He added: “We’re trying to balance the mar-
the group having failed to ket and it’s not an easy job. When we say this is
hit its targets, there are No shocks expected the right way to do it, we know from experience,
concerns about playing Oil price volatility has persisted despite ongoing so trust us.”
that hand too early. peace talks between Russian and Ukraine and
is unlikely to dissipate in the short term, with No politics
WHAT NEXT: summer air conditioning requirements likely The group’s Middle Eastern leaders have sought
Uncertainty about to cause a spike in crude burn, while increased to distance themselves from having to take a
Russian supplies and travel will raise fuel demand. position against Russia, with Saudi Energy Min-
a reduction in Kazakh Meanwhile, around 1.2-1.5mn bpd of Rus- ister Prince Abdulaziz bin Salman Al Saud say-
exports are likely to weigh sian crude is believed to have been removed from ing that OPEC+ is not a platform “for the moral,
heavily on the group’s the market because of sanctions and bans on ethical and political issues; when it comes to
ability to hit its quotas in imports from the country in light of the conflict OPEC, we have managed to compartmentalise
the coming months. in Ukraine, and roughly 3mn bpd is seen being our political differences for the last 35 years.”

P4 www. NEWSBASE .com Week 13 30•March•2022