Page 10 - EurOil Week 09 2022

EurOil POLICY EurOil

Unmoved by Ukraine conflict,

OPEC+ sticks to its guns

GLOBAL THE OPEC+ group surprised nobody in the Paris-based International Energy Agency (IEA)
industry this week when it announced that it would release 60mn barrels from their strate-
OPEC+ policy remains would add 400,000 barrels per day (bpd) of com- gic petroleum reserves (SPRs), with half of that
the same. bined oil production in April, as crude prices coming from the US. IEA Executive Director
continued to defy gravity. Fatih Birol said: “The situation in energy markets
Following a meeting in Vienna on March is very serious and demands our full attention.
2, the group signed off on the now-customary Global energy security is under threat, putting
easing of quotas, though data showed that its the world economy at risk during a fragile stage
January output was nearly 1mn bpd below of the recovery.”
target. However, the IEA’s efforts to reduce prices
The US has repeatedly asked OPEC kingpin failed to counter the geopolitical and supply
Saudi Arabia to increase production to bring security risk premium associated with the
prices lower, but Riyadh, and other members of ongoing conflict in Ukraine as ICE Brent crude
the group have been united in reiterating their futures hit a nine-year high of $113.94
dedication to the 2020 deal that has stabilised Concerns about the OPEC+ group’s ability to
markets and bolstered prices. ramp up output were clearly a factor in the rise
Perhaps the clearest expression of the indus- with data from OPEC’s Joint Technical Com-
try’s perspective was given Bahrain’s Oil Minis- mittee showing that production in January had
ter HE Mohammed bin Khalifa bin Ahmed Al missed the 23-nation group’s 40.493mn bpd by
Khalifa during last week’s International Petro- 972,000 bpd.
leum Technology Conference (IPTC) in Riyadh. For the long-term sustainability of the deal,
He thanked Saudi Energy Minister and “captain members will be urged to redouble efforts to
of the ship” Prince Abdulaziz bin Salman Al increase output, particularly in view of last
Saud for his role in steering the oil industry away year’s upward adjustment of the baseline for the
from the “edge of the abyss”. OPEC+ quotas, which will unwind the restric-
With the OPEC+ position clear, this week tions by almost 1.6mn bpd when it comes into
started with the news that 31 members of the effect in May. ™

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