OPEC+ Panel Unlikely to Propose Policy Changes as Oil Prices Hit 2024 High

• OPEC+ is unlikely to recommend changes to production policy at its upcoming meeting.
• Geopolitical tensions in the Middle East and optimism around demand have helped to push oil prices higher recently.
• The alliance will likely maintain current production cuts throughout the second quarter of 2024.

The Joint Ministerial Monitoring Committee (JMMC) of OPEC+ is unlikely to propose any changes to oil production policy when it meets on April 3, numerous sources in the alliance have told Reuters.

The JMMC, the panel that takes stock of oil market developments and proposes courses of action to the ministers of the OPEC+ group, is meeting on Wednesday, just as oil prices hit their highest level so far this year – and the highest in five months – amid renewed geopolitical tensions in the Middle East and signs of tightening oil supply.   

Brent Crude prices topped $88.50, and the U.S. benchmark, WTI Crude, hit $85 per barrel early on Tuesday following a Monday bomb strike that completely leveled the Iranian consulate in Damascus, Syria, with Tehran accusing Israel of being behind the strike.

Wednesday’s meeting of the OPEC+ monitoring panel is expected to be short and straightforward with no proposals for changes in the production policy, two of Reuters’s sources said.  

OPEC+ members collectively decided to voluntarily cut 2.2 million barrels per day (bpd) from the group’s production in the first quarter, although much of that was production cuts that were already in effect, including Saudi Arabia’s 1 million bpd voluntary cut.

In early March, the members of the OPEC+ alliance that had pledged the Q1 cuts announced they would roll over the supply reductions until the end of the second quarter.

Saudi Arabia, Iraq, the United Arab Emirates (UAE), Kuwait, Kazakhstan, Algeria, Oman, and Russia are now cutting their respective crude oil production and exports in the first half of 2024 with extra voluntary reductions, on top of the voluntary cuts OPEC+ previously announced in April 2023 and later extended until the end of 2024.  

Russia will be cutting oil production instead of exports in the second quarter of 2024 so that all OPEC+ producers that reduce output contribute equally to the cuts, Russian Deputy Prime Minister Alexander Novak said last week.   

By Tsvetana Paraskova for Oilprice.com

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