OPEC+ oil producers meeting on Wednesday will likely stick to modest output rises, officials said, as OPEC heavyweights Saudi Arabia and the United Arab Emirates (UAE) recommit to their deal with Russia despite widening sanctions on Moscow and oil prices at eight-year highs.
Oil has shot above $110 per barrel this week as Western sanctions on Russia for its invasion of Ukraine disrupted supply from Russia, the world’s second largest oil exporter, and caused problems with exports from neighbouring Kazakhstan.
The Organization of the Petroleum Exporting Countries (OPEC) and allies led by Russia – known as OPEC+ – have been raising output by 400,000 barrels per day (bpd) each month since August as they unwind cuts made after the pandemic slashed demand.
Three OPEC+ sources said the group would likely agree on another 400,000 bpd increase for April.
Russia’s invasion of Ukraine – which Moscow calls a “special operation” – had had no impact to date on the functioning of the output deal, they said.
“Saudi brushed off factoring geopolitical tensions into the meeting, and said stick with the fundamental story,” one of the OPEC+ sources said.
Formal talks on Wednesday begin at 1200 GMT with a meeting of the Joint Ministerial Monitoring Committee, which can recommend a course of action to the full group whose meeting starts at 1230 GMT.
The United States has repeatedly said it would like to see OPEC+ increase by more.
Yet only a few countries have spare capacity, including de facto OPEC leader Saudi Arabia and its Gulf neighbour the UAE.
Riyadh has so far resisted U.S. calls to increase output more quickly than called for under the OPEC+ agreement.
OPEC+ still has 2.6 million bpd of cuts it expects to unwind by the end of September.
Saudi Arabia’s cabinet on Tuesday reaffirmed its commitment to the OPEC+ agreement, the Saudi state news agency said.
Russian President Vladimir Putin held a call with Abu Dhabi Crown Prince Sheikh Mohammed bin Zayed al-Nahyan on Tuesday.
The UAE, a close U.S. ally in the Middle East, abstained in a Feb. 25 vote on a draft United Nations Security Council resolution deploring Moscow’s actions.