OPEC+ will most likely continue boosting oil production at the current rate of around 400,000 bpd at its next meeting.
Citing unnamed sources close to the extended cartel, Reuters reported that OPEC will likely shake hands on expanding total output by some 432,000 bpd when it meet on Friday, May 6, with the increase to take effect in June.
The production increase plan has been in place since last year when OPEC and its non-member partners, led by Russia, agreed to gradually restore their combined oil production to pre-pandemic levels.
However, many group members have consistently failed to deliver the agreed production increases for various reasons, chief among them underinvestment and political trouble.
Last month, for example, OPEC alone increased its combined production by just 57,000 bpd, of which 54,000 bpd came from Saudi Arabia. The UAE also increased its production but the African members of the cartel saw their output decline during the month.
Nigeria, one of the bigger producers in OPEC, has a quota of 1.718 million bpd, but in March, it only pumped 1.354 million bpd.
The total production of OPEC+ for March was 1.45 million bpd below the agreed level, on the back of Western sanctions against Russia, whose output during the month was 300,000 bpd below its quota at 10.018 million bpd.
Russia expects its oil production to shrink by 17 percent this year because of the sanctions, Reuters reported earlier this week, citing a document produced by the country’s economy ministry. That would mean an average daily production rate of between 8.68 million bpd and 9.5 million bpd.
There are only two members of the OPEC+ group that could potentially fill the gap: Saudi Arabia and the United Arab Emirates. Both, however, have refused to heed calls from large importers to boost production by more than their OPEC+ quotas.
By Irina Slav for Oilprice.com
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