OPEC+ will most likely stick with the current production increase of 400,000 barrels per day at its next meeting on March 31. Eyes will of course be particularly on OPEC now, as sanctions on Russian oil are severely restricting supply on the world market. Russia produces about 10M barrels a day about 10% of the world’s demand.
Saudi Arabian Energy Minister Prince Abdulaziz bin Salman and United Arab Emirates Energy Minister Suhail al-Mazrouei had taken a joint view of the current global situation on Tuesday on the sidelines of the Dubai Energy Forum. They repeatedly pointed out the importance of Russian oil production and shared the opinion that the situation in Ukraine has nothing to do with global energy policy. Therefore, the two issues should be considered separately. The UAE minister argued that OPEC+ is not there to take a side in a war, but to stabilize the global oil market.
The UAE energy minister has also responded to pressure from Western countries, particularly the U.S. and EU, which are calling on OPEC to produce more oil,
“What we are asking for not to tell us ‘do this and do that’. We are experts in our field and we have been doing it for a very long time.”
This means that OPEC will not be intimidated by pressure from the West and will calmly stand by its position.
Oil prices received a further boost from last week’s attack on an oil facility belonging to Saudi Aramco. Statements said Houthi rebels from Yemen were responsible. The Saudi energy minister said Saudi Arabia’s ability to supply the world with needed energy was now in question.
“It goes without saying that if this security supply is impacted, it will impact us … but more fundamentally, I think it also will affect the world economy,”Prince Abdulaziz said at the World Government Summit in Dubai.
This could also lead to state-owned energy company Saudi Aramco raising its selling prices for the second year in a row.
Bloomberg has reported that Saudi Aramco will most likely raise the price of its Arab Light crude by $5 per barrel for May shipments to Asia. However, there is no public statement from the company yet, so traders and refiners should keep an eye on the first five days of the month, as that is when Saudi Aramco usually announces prices.