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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