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OPEC+ swerves Ukraine crisis and sticks to oil output plans

Category: Economy

Date: 2022-03-03T05:36:36+0000
OPEC+ swerves Ukraine crisis and sticks to oil output plans

Shafaq News / OPEC+ oil producers agreed on Wednesday to stick to their plans for a modest output rise in April, ignoring the Ukraine crisis during their talks and snubbing calls from consumers for more crude even as crude prices rocketed higher.

Oil prices shot above $110 a barrel this week, hitting peaks not seen since 2014, as Western sanctions tightened on Moscow over its invasion of Ukraine and disrupted oil sales from Russia, the world's second-largest oil exporter.

The Western measures have deterred many buyers of Russian crude and even caused problems for exports from Russia's neighbour, Kazakhstan, another member of OPEC+.

The group comprising the Organization of the Petroleum Exporting Countries, Russia and allied producers has been hiking output by 400,000 barrels per day (bpd) each month since August as OPEC+ unwinds cuts made when the pandemic slashed demand.

The group has resisted repeated calls from the United States and other major consumers for more supplies.

In a statement after Wednesday's meeting that announced the decision to roll over existing plans, the group made no mention of the Ukraine crisis, simply referring to "geopolitical developments" that were unsettling the market.

"Current oil market fundamentals and the consensus on its outlook pointed to a well-balanced market, and that current volatility is not caused by changes in market fundamentals but by current geopolitical developments," the OPEC+ statement said.

After Wednesday's talks, which lasted less than a quarter of an hour and the shortest meeting on record, one source said: "There was not even a word pronounced on the Ukraine issue."

Other sources confirmed that the group, which includes Saudi Arabia, a U.S. ally and the world's biggest oil exporter, had not touched on the Ukraine crisis.

Alexander Novak, the Russian deputy prime minister who represented Russia at the OPEC+ talks, said he hoped oil market volatility would ease and said Russian output was expected to reach pre-pandemic levels in May.

OPEC+ still has 2.6 million bpd of cuts it expects to unwind by the end of September, while demand for oil rebounded sharply as the pandemic has waned, sending oil prices sharply higher.

The next OPEC+ meeting is scheduled for March 31.

(Reuters)

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