OPEC + producers agreed to commit in April 2022 to the modest production increase planned in advance, (400,000 barrels per month since August 2021).
In the markets, the price of oil exceeded 110 dollars this week, which is the highest level for oil prices in nearly eight years. This comes due to the strong recovery in demand with the decline in the impact of the pandemic.
Western sanctions imposed on Russia due to its invasion of Ukraine have disrupted oil sales from Russia, which is the second largest oil exporter in the world, and Western measures have reduced a lot of Russian crude sales, and even caused problems in exports from Kazakhstan, neighboring Russia, both of which are members of the OPEC+ group.
The OPEC+ statement said that the fundamental factors in the oil market currently and the consensus in its expectations indicates a well-balanced market and that the current turmoil is not due to a change in market fundamentals, but rather due to the current geopolitical developments.
Alexander Novak, the Russian Deputy Prime Minister who represented Russia in the OPEC+ talks, expressed his hope that oil market volatility will ease, and said that Russian production is expected to reach pre-pandemic levels in May 2022 and describes Russia, which is under increasing pressure from the Western sanctions, which tumbled the ruble and forced it to raise interest rates, described its moves in Ukraine as a “special operation” and said it had no intention of occupying it.
The cartel has resisted demands from the United States and other consuming countries to pump more supplies, as practically there is no spare capacity to increase production in most of the group’s countries, with the exception of a few countries, including Saudi Arabia and the UAE. The remaining effective cuts to OPEC+ production due to the pandemic are 2.6 million barrels per day, and the group is expected to recover them by the end of September 2022.