OPEC to meet virtually
The 26th OPEC+ ministerial meeting will take place today, as Russia’s attack on Ukraine is expected to disrupt already tight supplies of crude oil.
OPEC+ has faced pressure from top consumers, including India and the US, to pump more oil to reduce prices and facilitate economic recovery, but the group has been hesitant to call for significant production increases despite higher oil prices.
OPEC+ oil producers will likely decide to increase output by 400,000 barrels per day (bpd) by April, as the group tries to unwind historic production cuts that were implemented in 2020 due to the pandemic causing a decrease in global demand.
The US and the EU have announced sanctions that would limit Russia’s access to the global financial system but would not directly hit oil and gas exports. The US will likely avoid implementing more damaging, direct sanctions on energy, as this would hurt the it.
Given Russia’s coordination with Saudi Arabia, the invasion of Ukraine will not disrupt cooperation down the line, and most OPEC+ countries appear to show a neutral stance. Instead, OPEC+ remains primarily focused on gradually easing back production quotas to return to pre-pandemic output by late 2022.
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