The OPEC+ group agreed on Thursday to leave its production plan unchanged, aiming to boost crude oil production in June by 432,000 barrels per day (bpd), in a move widely expected by the market.
Following a very short virtual meeting, the OPEC+ ministers decided to keep the production plan as-is, continuing the modest monthly increases in nominal production.
This was the third OPEC+ meeting since one of the key members of the alliance, Russia, invaded Ukraine. For a third consecutive month, OPEC’s press release on the record short meeting read that “it was noted that continuing oil market fundamentals and the consensus on the outlook pointed to a balanced market”.
The meeting “further noted the continuing effects of geopolitical factors and issues related to the ongoing pandemic”, OPEC said.
The action of the OPEC+ group, or rather, the inaction, could be justified this time, due to persistent market concerns about slowing oil demand in China, on the one hand, and the possibility that losses of Russian supply would only pile up from now on, on the other hand.
Oil prices will remain elevated in the coming months as current supply losses from Russia at around 1 million bpd could double this month, BP’s chief executive Bernard Looney told CNBC earlier this week. Moreover, the European Commission on Wednesday officially proposed a full ban on Russian crude and oil product imports by the end of the year.
While OPEC+ is sticking to its policy of modest monthly increases, many of its members are not pumping to their quotas and the group overall is around 1.5 million bpd below its quota.
Per today’s decision and the production table OPEC provided, OPEC+ will have a quota of 42.558 million bdp for June. Saudi Arabia and Russia, the leaders of the OPEC and non-OPEC groups in the pact, will each have a quota of 10.663 million bpd.
By Tsvetana Paraskova for Oilprice.com
More Top Reads From Oilprice.com: