The Organization of the Petroleum Exporting Countries and allies led by Russia, a group known as OPEC+ which produces more than 40% of global oil supply, has faced calls from the United States, India and others to pump more oil as economies recover from the pandemic.
But OPEC+ has stuck to its target of monthly increases of 400,000 barrels per day (bpd) and blamed surging prices on the failure of consuming nations to ensure adequate investment in fossil fuels as they shift to greener energy.
Several OPEC+ sources also said prices had been pushed up by Russia-US tensions. Washington has accused Moscow of planning to invade Ukraine, which Russia denies.
“We are living the Olympic spirit and therefore we broke the record for the meeting concluding it in 16 minutes,” Saudi Energy Minister Prince Abdulaziz bin Salman told the meeting, according to a source who heard him during the shorter than usual online gathering.
OPEC+ oil output increases are complicated by the fact that several OPEC members have struggled to meet even current monthly targets and lack spare capacity to boost production any further.
Only a handful of states, notably Saudi Arabia, have some spare capacity that could help boost the overall output level of OPEC+. But starting that up might drive oil prices higher still, as it would remove a safety cushion in case of any global shock.
Many OPEC watchers and analysts compared today’s situation to the 2007-2008 crisis when oil rallied to an all-time high of $147 a barrel when OPEC lacked extra oil supplies to meet soaring Chinese demand.
Brent crude was trading up 1% above $90 a barrel on Wednesday and touched a seven-year high of $91.70 last week, amid tensions in Europe and the Middle East.
A report prepared for the meeting by OPEC+ experts and seen by Reuters kept the 2022 forecast for world oil demand growth unchanged at 4.2 million bpd, and said demand would hit pre-pandemic levels in the second half of the year.
Oil demand was slightly above 100 million bpd in 2019 but was hammered by the pandemic in 2020, when OPEC+ cut its production by a record 10 million bpd or 10% of global supply.
The remaining cuts stand at 2.6 million bpd and OPEC+ hopes to wind them down before the end of the year.
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