OPEC and Russia confirm 400,000 bpd more from April

OPEC and its 10 independent allies, including Russia, confirmed today that they will add 400,000 barrels a day of crude to their supplies in April, a modest increase planned in July last year, even as oil prices have soared because of the war in Ukraine.

The Organisation of the Petroleum Exporting Countries (OPEC) said in a statement on its website at the end of a brief virtual meeting of industry ministers from the 23-country alliance known as OPEC+.

They indicated, in their final statement, that there was "consensus" among them that the oil market is currently "well balanced" and that "the current volatility (in prices) is not caused by changes in market fundamentals, but by current geopolitical developments".

Accordingly, they confirmed to "adjust global production (of the group) upwards by 0.4 mbd for the month of April" and to reconvene on 31 March.

The decision was expected by the markets, after several OPEC+ members, including Saudi Arabia, made it clear that they did not plan to modify the roadmap in force since August 2021, through which they aspire to gradually recover, until next September, the production level of before the pandemic.

The rate of increase, 400,000 bd per month, is considered too slow by Washington and other consumer countries to curb the rise in "oil prices" and inflation, a trend exacerbated by the Russian invasion of Ukraine.

Brent crude oil, Europe's benchmark, was trading at $111.59 on Wednesday on the London futures market, up 6.3 per cent from Tuesday's close.

Today's decision sets the OPEC+ production ceiling at 41.698 million barrels per day (mbd), of which 24.316 mbd corresponds to OPEC (excluding pumping by Venezuela, Iran and Libya) and 16.381 mbd to the ten allied independent producers as a whole.

The quotas of Saudi Arabia (OPEC member) and Russia (non-member), by far the largest producers and exporters in the group, each amount to 10.436 mbd next month.