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conservatism and the leadership that Saudi has The hope in Riyadh will be that if it continues
shown to right the ship. showing restraint, it can encourage or enforce it
Speaking to Anadolu Agency last week, Ian among others, with many in the industry wary
Simm, principal advisor at IGM Energy, said: of Saudi Arabia’s expanded spare capacity, which
“By continuing to restrain its own domestic assuming full compliance with its 1mn bpd cut,
output by 1mn bpd, convincing other member would be around 3mn bpd.
countries to maintain the production cuts largely Indeed, Prince Abdulaziz said that Saudi’s
as they are, and encouraging improved compli- voluntary cut would be phased out “at our con-
ance, Saudi Arabia’s leadership of the group and venience”, adding that the Kingdom was “not in
the global oil industry is as evident as ever.” a hurry” to ramp up output levels.
While other members of the cartel appeared While Saudi Arabia failed to fully achieve its
desperate to benefit from higher prices, Riyadh’s promised reduction, it accounted for the major-
interests are best served by growing demand and ity of an OPEC+-wide 870,000 bpd cut during
long-term price stability anywhere north of $50. February compared to March, according to a
As such, the Kingdom continues to portray itself Reuters survey of OPEC sources.
as the guardian of the oil market and having now At present, OPEC+ output is seen sitting
more than made up for the damage it caused by at 43.6mn bpd throughout the second half of
engaging in a price war with Russia last year, this the year, factoring in the Russian and Kazakh
self-determined title is justified. upticks. However, several countries have shown
signs of creaking over the past few months.
Where to next? With Iraq’s economic struggles showing lit-
Attention now moves to the next OPEC+ meet- tle signs of abating, Baghdad has come under
ing at the end of March. While fundamentals criticism from other members for its failure
over the next few weeks will determine the to comply with restrictions. While Oil Minis-
direction of decision-making, the current state ter Jabbar has repeatedly said that the country
of the market suggests that a large-scale lifting of would comply with its quota while making
production is highly unlikely. compensatory cuts to make up for historical
Speaking to Middle East Oil & Gas (MEOG) non-compliance, achieving this has so far
this week, Simm said that with Saudi seeing the been elusive.
success of the policy on cuts, Riyadh is likely to Meanwhile, as the UAE’s Abu Dhabi National
continue lobbying other members to maintain Oil Co. (ADNOC) seeks to expand its oil pro-
their restraint. duction and exert greater influence, reports have
“Non-compliance by other members has surfaced about plans to end the UAE’s OPEC
been the Kingdom’s main bone of contention membership. Given the way in which the market
over the last year or so. Having promised to do has been propped up by the actions of OPEC+,
a disproportionate amount of the heavy lifting any such move is unlikely in the short term, how-
through its 1mn bpd cut, Prince Abdulaziz et al ever, as Abu Dhabi and Riyadh to toe-to-toe in
are in a strong position to demand better com- the oil and now the nascent hydrogen markets,
pliance from members with a history of lagging the former’s ambitions could become problem-
behind,” he added. atic for the cartel.™

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