The Organisation of Petroleum Exporting Countries (OPEC) and its allies, OPEC+, announced that it would stick to existing plans for a modest oil increase of 400,000 barrels per day.
The Organisation said on Wednesday that it would take effect from April in spite of surging crude prices.
OPEC+ reconfirmed “the decision to adjust upward the monthly overall production by 400,000 barrels per day for the month of April 2022,“ according to a statement released after the 26th OPEC and non-OPEC Ministerial Meeting.
The 23-member oil alliance noted in the statement that the current volatility in the oil market is caused by geopolitical developments rather than changes in market fundamentals.
“Current oil market fundamentals and the consensus on its outlook pointed to a well-balanced market,’’ it said.
Meanwhile, oil prices have jumped to multi-year highs in recent days as the ongoing Russia-Ukraine conflict prompted fears about supply disruptions from Russia, a major oil exporter.
Earlier, on Tuesday, the West Texas Intermediate (WTI) crude settled at 103.41 U.S. dollars a barrel on the New York Mercantile Exchange, the highest settlement since July 2014, while Brent crude closed at 104.97 dollars a barrel on the London ICE Futures Exchange, the highest finish since Aug. 8, 2014.
The International Energy Agency announced earlier on Tuesday that its member countries have agreed to release 60 million barrels of oil from their emergency reserves to ease any supply shortfall caused by the Russia-Ukraine conflict.
However, analysts say the move has failed to ease pressure on oil prices with continued oil rallies on Tuesday and Wednesday.
Both WTI and Brent crude shot above 110 dollars a barrel on Wednesday.
In July 2021, OPEC+ agreed to rise oil output by 400,000 barrels per day each month to gradually unwind the production cuts made at the height of the COVID-19 pandemic in 2020.
The oil-producer group has since been sticking to the plan in spite of calls from top consumers, including the U.S, to further boost supplies to rein in soaring oil prices amid demand recovery and geopolitical tensions.
OPEC Secretary General Mohammad Barkindo on Tuesday said that OPEC+ will remain “proactive, nimble and attentive to changing market conditions.’’
The global oil demand is projected to rise by 4.2 million barrels per day in 2022, Barkindo said.
