Despite $100 oil and the Russian invasion of Ukraine, the OPEC+ alliance is set to rubberstamp another 400,000 bpd increase in monthly production targets next week, several OPEC+ sources told Reuters on Friday.
Russia and OPEC's de facto leader Saudi Arabia lead the OPEC+ group, which has been managing supply to the market since the beginning of 2017 and survived the 2020 crash in demand and a month-long rift over market share between OPEC's Saudi Arabia and the leader of the non-OPEC group in the pact, Russia.
Several OPEC members are also U.S. allies, such as the United Arab Emirates (UAE) and Kuwait.
The Russian invasion of Ukraine -the move that triggered oil's jump to $100 earlier this week-hasn't changed the dynamics in the OPEC+ group, sources at the alliance told Reuters.
"Russia has a close partnership with the Saudis, so the cooperation will go on," a Russian oil source told Reuters. "Regarding the next meeting - no changes are expected for now," the source added.
A senior source with OPEC+ rejected the idea that the Russian attack on Ukraine could be the end of the OPEC+ alliance.
Four other sources at OPEC+ told Reuters they did not expect changes in the deal when ministers meet next week to discuss output levels for April. OPEC+ needs to keep a steady policy and not politicize the decision because it is not a political organization, those sources said.
Meanwhile, OPEC and OPEC+ have not been pumping as much as the OPEC+ pact calls for, essentially tightening the market and distorting analyst assumptions about market balances. For half a year now, OPEC+ has actually added lower volumes to the market each month than the 400,000 bpd nominal monthly increase announced in each of the OPEC+ meetings since August 2021.
Estimates in the International Energy Agency's monthly oil market report for February showed that the gap between OPEC+ production and its target levels surged to as much as 900,000 bpd in January.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews. More