• 3 minutes e-car sales collapse
  • 6 minutes America Is Exceptional in Its Political Divide
  • 11 minutes Perovskites, a ‘dirt cheap’ alternative to silicon, just got a lot more efficient
  • 1 day GREEN NEW DEAL = BLIZZARD OF LIES
  • 2 days The United States produced more crude oil than any nation, at any time.
  • 7 days e-truck insanity
  • 3 days How Far Have We Really Gotten With Alternative Energy
  • 7 days Oil Stocks, Market Direction, Bitcoin, Minerals, Gold, Silver - Technical Trading <--- Chris Vermeulen & Gareth Soloway weigh in
  • 6 days James Corbett Interviews Irina Slav of OILPRICE.COM - "Burn, Hollywood, Burn!" - The Corbett Report
  • 6 days The European Union is exceptional in its political divide. Examples are apparent in Hungary, Slovakia, Sweden, Netherlands, Belarus, Ireland, etc.
  • 7 days Biden's $2 trillion Plan for Insfrastructure and Jobs
  • 7 days "What’s In Store For Europe In 2023?" By the CIA (aka RFE/RL as a ruse to deceive readers)
  • 11 days Bankruptcy in the Industry
Irina Slav

Irina Slav

Irina is a writer for Oilprice.com with over a decade of experience writing on the oil and gas industry.

More Info

Premium Content

Why OPEC Won’t Open The Taps

  • Middle Eastern OPEC producers have made it clear that they do not plan to increase production beyond the current OPEC+ quotas.
  • The producers believe that the current price rally has been driven by geopolitical factors rather than market fundamentals.
  • Saudi Arabia’s energy minister did recognize that years of underinvestment in oil exploration was now causing risks on the supply side.
OPEC

Middle Eastern OPEC producers have no plans to increase production beyond their OPEC+ quotas, a gathering of ministers this weekend has made clear.

The energy minister of the biggest oil producer in the cartel, Saudi Arabia, said that the pandemic had taught oil-producing nations one thing, and that was caution, Reuters reports.

"Caution, a word that I know some people hate me for, but... I will continue being cautious and (mindful of) the need to retain flexibility in our strategy and adopt a long-term perspective," Prince Abdulaziz bin Salman said.

His stance was echoed by Iraq's oil minister, Ihsan Abdul Jabbar Ismail, who said that the cartel should stick to its original plan of adding 400,000 bpd in combined production every month to avoid surprises.

His UAE counterpart, Suhail al Mazrouei, for his part, blamed the latest price rally on geopolitical factors.

"We are all hoping for the de-escalation... I think our plan has been working, and I don't believe that the market is hugely under-supplied currently. It's the other factors that are outside our hands which are impacting the market," al Mazrouei said, as quoted by Reuters.

Yet geopolitical tensions spikes tend to have a transitory effect on prices, while OPEC+'s failure to stick to its own production quotas suggests a deeper inability for most producers to boost production as much as agreed.

Saudi Arabia's bin Salman recognized this, commenting that the world's oil-producing nations may not be able to provide the supply necessary for the global economy to recover fully from the pandemic. For this, the energy minister blamed years of underinvestment in oil exploration.

One might be tempted to think that OPEC is looking after its own interests in refusing to boost production, but it appears that current oil prices are too high even for the oil-producing nations. As several OPEC officials said earlier this month, higher oil prices contribute to inflation, which is a serious problem for most OPEC members, and sap the demand for oil.

ADVERTISEMENT

By Irina Slav for Oilprice.com

More Top Reads From Oilprice.com:


Download The Free Oilprice App Today

Back to homepage





Leave a comment
  • Dave on February 21 2022 said:
    I think it's a show, I think there struggling to reach quotas as it is, so not only can they not realistically raise rates, but they also won't because further failures to meet rate increases will signal weakness, politically and economically. They will likely need time and capital reinvestment into there fields to rebuild production and reliability.

Leave a comment




EXXON Mobil -0.35
Open57.81 Trading Vol.6.96M Previous Vol.241.7B
BUY 57.15
Sell 57.00
Oilprice - The No. 1 Source for Oil & Energy News