An OPEC+ ministerial panel is expected to maintain the status quo on oil output policy during its upcoming meeting on April 3, as indicated by five sources within OPEC+. Despite oil prices reaching their peak for the year, the panel is unlikely to propose any alterations, the sources informed Reuters.
The Organization of the Petroleum Exporting Countries (OPEC) and its allied partners, led by Russia, are set to convene for an online session to review market conditions and assess members’ adherence to previously agreed-upon output reductions. The surge in oil prices this year has been fueled by constrained supply and geopolitical tensions, notably including attacks on Russian energy infrastructure and conflicts in the Middle East. Brent crude, for instance, surged to $89 a barrel on Tuesday from $77 at the close of 2023.
Anticipating a straightforward gathering, two undisclosed sources pointed to the recent decision to extend output cuts as a contributing factor. The meeting, scheduled for 1 p.m. Vienna time (1100 GMT), follows OPEC+ members’ agreement the previous month to prolong voluntary output reductions by 2.2 million barrels per day (bpd) to stabilize the market. Notably, these cuts are not uniformly distributed across all members of the alliance.
Russian Deputy Prime Minister Alexander Novak disclosed on Friday that Russia intends to prioritize reducing oil production rather than exports in the second quarter. This move aims to ensure a balanced distribution of production cuts among OPEC+ members.
As the voluntary cuts approach their expiration at the end of June, the cumulative reductions by OPEC+ are poised to decrease to 3.66 million bpd, as initially agreed upon in earlier phases dating back to 2022.
The Joint Ministerial Monitoring Committee (JMMC) is comprised of key OPEC+ nations, including Saudi Arabia, Russia, and the United Arab Emirates. Typically convening every two months, the panel has the authority to propose policy adjustments, subject to further discussion and ratification in a comprehensive ministerial assembly involving all member states.
