OPEC+ announced its decision today to increase its monthly oil output by a modest amount in line with its previous agreement, boosting its production by an additional 430,000 barrels per day (bpd) from May 2022.
The coalition resisted calls to increase its output past its current level of 11.7 million bpd to make up for the lack of Russian oil supply since the state’s invasion of Ukraine on 24 February.
“The consensus on the outlook pointed to a well-balanced market,” OPEC said in a tweet. “Current volatility is not caused by fundamentals, but by ongoing geopolitical developments.”
The global supply has currently seen a disruption of an estimated five to six million bpd, which amounts to approximately 5-6% of the international demand for the commodity.
“Saudi Arabia will be keen to avoid falling out with Russia by adding extra barrels at a time when Russian production is struggling,” said Callum Macpherson at Investec via Reuters.
The organisation also suspended its use of International Energy Agency data in favour of reports from consultancies Rystad Energy and Wood Mackenzie, following disagreements within the group over the IEA’s data.
UAE Energy Minister Suhail al-Mazrouei criticised the Agency for allegedly being unrealistic in its recommendations, following the IEA’s statement that no new oil and gas projects receive the green light past 2021.
In contrast, Rystad Energy’s stance argued that hundreds of new oilfields would soon be required to handle the level of fossil fuel demand.
The news follows President Biden’s announcement that the US is currently considering tapping into its 180 million barrel Strategic Petroleum Reserve in a bid to replace a level of the global oil supply lost over Russian sanctions.
The White House confirmed that President Biden will be making an official statement on his decision at 17:30 GMT tonight.