IEA Executive Director Fatih Birol recently said that he was "really disappointed" by Opec-plus producers' lack of a sense of urgency during the current tight market. Tension has been building between the IEA and Opec-plus for some time. Wood Mackenzie and Rystad Energy will replace it.
"There is no reason to change the agreement now because there is no shortage in the market," said one delegate.ĭelegates also said Opec-plus is dropping the International Energy Agency (IEA) as one of the secondary sources used to assess members' crude oil production and compliance with production cuts. The targeted increases in Opec-plus output should reach the market as both Saudi Arabia and the UAE - which hold most of the group's spare capacity - will be allowed to pump more oil.ĭuring a meeting on Wednesday of the alliance's Joint Technical Committee (JTC), technocrats agreed that, for now at least, the market remains balanced - despite supply risks associated in particular with the war in Ukraine. This means that from May, Saudi Arabia would have a production quota of 10.549 million b/d and the UAE of 3.04 million b/d. The baselines of Saudi Arabia and Russia will each rise by 500,000 b/d, while the UAE's will go up by 332,000 b/d and Iraq's and Kuwait's each by 150,000 b/d.Įnergy Intelligence understands that delegates agreed in July that the 432,000 b/d increment would be redistributed among the group’s members bearing in mind the new baselines. The agreement reached with the UAE also provided for increases in the baselines of Saudi Arabia, Russia, Kuwait and Iraq from May of this year. Opec-plus had started out in May 2020 with production cuts of 9.7 million b/d to balance the market after the Covid-19 pandemic caused demand for oil to collapse. It was also agreed at the time that the group would gradually return 5.76 million b/d of production to the market over a 14-month period, which ends when the current pact expires in September. The baseline numbers are used to determine countries' quotas. The higher monthly increases from May are the result of a compromise reached last summer, when the United Arab Emirates (UAE) requested a higher baseline production figure. It has also become difficult to quantify Russia's production and exports since it invaded neighboring Ukraine on Feb.
On top of this, Kazakhstan has said it expects its crude production to fall by around 320,000 b/d in April because of repairs at the Caspian Pipeline Consortium (CPC) loading terminal on Russia's Black Sea coast. While the alliance has been targeting steady monthly increases, it has recently been falling short of its 400,000 b/d goal because many members are unable to raise their output any further. If approved by member states' ministers on Thursday, monthly increases in the alliance's combined output would rise to around 432,000 barrels per day in May-September, from 400,000 b/d since August of last year - at least on paper. Opec-plus is expected to implement a previously agreed plan to change oil production baselines for five countries on Thursday, which could lead to a modest increase in volumes reaching the market, delegates told Energy Intelligence.
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