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- The quotas are as follows: an increase in OPEC+ production will not stop the rise in oil prices
The quotas are as follows: an increase in OPEC+ production will not stop the rise in oil prices
The ministers of the eight OPEC+ countries decided to increase oil production limits by about 206,000 barrels per day in May. With supply losses of at least 7 million barrels amid the Middle East conflict, the cartel's decision, according to analysts, seems more than modest and suggests that the alliance probably does not have levers of influence on the situation. But in the context of the global energy crisis, this is an inevitable step, experts say. The measure is designed to at least partially compensate for the loss by the market of those volumes of oil that are blocked in the Persian Gulf, but it is unlikely that this will save from rising prices, which are already breaking historical records.
What the cartel members agreed on in April
To support the stability of the oil market, the eight participating countries decided to increase production by 206,000 barrels per day, compared with additional voluntary adjustments of 1.65 million barrels announced in April 2023, OPEC said in a statement.
At the same time, the alliance members also "expressed concern about attacks on energy infrastructure, noting that restoring damaged energy facilities to full capacity is expensive and takes a long time, which affects the overall availability of energy supply."
They stressed that any actions that undermine its security, including disruption of international sea routes, increase market volatility. At the same time, they weaken collective efforts to maintain its stability in the interests of producers, consumers and the global economy.
"In this regard, eight countries expressed gratitude to OPEC countries that have taken the initiative to ensure continued availability of supplies, in particular through the use of alternative export routes, which has helped reduce market volatility," OPEC said in a statement.
At the last meeting, which took place on March 1, on the second day of the Middle East conflict, the cartel members agreed to increase oil production quotas for April by only 206,000 barrels per day, "due to the stable global prospects for the global economy and healthy market indicators reflected in low reserves of raw materials."
Iran traditionally does not participate in decisions regarding voluntary quotas for oil production, as it was initially exempt from obligations under them, said Tamara Safonova, Director General of the Independent Analytical Agency for the Oil and Gas Sector.
"But in the current situation, it is Iran's participation that could make it possible to make coordinated decisions regarding the stabilization of supplies through the Strait of Hormuz, since it will be difficult to physically increase production if the routes remain closed," she told Izvestia.
How has the situation on the oil market changed?
Since the beginning of March, oil prices have increased by almost 50%. If on February 28, the price of North Sea Brent was $72.78 per barrel, then at the close of trading on Thursday, April 2 (on April 3, trading was not conducted due to the Easter holiday) for the same volume, the June contract closed at $109.03.
According to the head of the International Energy Agency (IEA), Fatih Birol, about 40 key energy assets in the Middle East were damaged as a result of the Gulf war: "Some of them are slightly damaged, but some are seriously or even very seriously damaged."
According to the IEA, since the beginning of March, global oil supply has already decreased by 12 million barrels per day due to the conflict. By the end of April, the losses could be twice as high, Fatih Birol believes.
— In March, some cargoes of oil and gas from the Middle East were already shipped, even before the war, and they are still arriving at the ports of their destination countries. But that won't be the case in April. This means that even according to our conservative estimates, oil losses in April will be twice as much as in March. In addition to this, there will be LNG losses," the head of the IEA warned.
OPEC countries cut production by 7.2 million barrels per day in March, according to a Reuters poll conducted using data from the LSEG platform and analytical information providers, including Kpler. According to the IEA, OPEC+ production averaged 37.76 million barrels per day by the end of 2025.
Fatih Birol added that the measures taken by the IEA countries to release oil reserves are important, and allowed new supplies from their reserves. At the same time, he stressed that the most important task for today is the opening of the Strait of Hormuz.
By the end of March, exports of petroleum products from the Middle East collapsed by 4.8 million barrels per day relative to pre-war levels. The average was 2.8 million barrels per day last month, BloombergNEF analysts calculated based on Vortexa data.
Currently, Iran continues to control the passage through the Strait of Hormuz, which accounts for about a quarter of the world's oil and petroleum products traffic and a fifth of the world's liquefied natural gas trade. The new Iranian system of regulating navigation along the waterway implies the division of states into "neutral", "friendly" and "hostile". The latter will be prohibited from passing through the strait.
What does OPEC's decision mean?
OPEC+'s decision is largely limited by the fact that most of the participating countries are located precisely in the conflict zone and do not have the opportunity to increase production, even if they want to do so, says Dmitry Scriabin, portfolio manager at Alfa Capital Management Company.
The decision to increase production within the framework of the alliance was quite expected, said Valery Andrianov, associate professor at the Financial University under the Government of the Russian Federation.
— In the context of the global energy crisis, this is an inevitable step designed to at least partially compensate for the loss by the market of those volumes of oil that are blocked in the Persian Gulf. The only question is whether these volumes will actually reach consumers, since the increase in quotas will primarily affect Saudi Arabia, Iraq and the United Arab Emirates, which cannot transport current volumes through Hormuz.
He noted that in March, Saudi Arabia's oil exports would decrease by 50%, production was reduced by 2-2.5 million barrels per day due to overfilling of storage facilities. Against this background, the March increase in the CSA quota by 62 thousand barrels per day as part of the previously agreed first stage of production increase by OPEC+ countries looks more like a mockery. The situation is similar with Iraq and the UAE.
In other words, according to Valery Andrianov, the Gulf countries are under-fulfilling the current quotas for millions of barrels due to the war, and their further increase will not achieve anything in practical terms. Therefore, the current decision is designed solely for a psychological effect.
— This is an attempt to demonstrate that the alliance has its finger on the pulse and at the same time gives carte blanche to increase supplies from those countries of the alliance that are located outside the Persian Gulf. But the range of such countries is extremely narrow — by the end of March, production growth was observed only in Nigeria and Venezuela, which, however, OPEC+ quotas do not apply to. Kazakhstan showed very little growth due to existing logistical constraints.
Valery Andrianov noted that continued sanctions pressure in Russia is hindering export growth, primarily restrictions on the tanker fleet, including direct risks of seizure, as well as attacks on our port infrastructure in Primorsk.
"So the current decision is nothing more than a signal that OPEC+ is still alive, but it can't influence the situation in any way," the source told Izvestia.
According to Ekaterina Kosareva, managing partner of VMT Consult, OPEC+'s decision looks like a compromise and a confirmation that the existence of the cartel itself is a lever of influence on the market.
— In fact, the OPEC+ group of Eight only demonstrated unity of decisions and an attempt to increase oil production. Today, it is trading over $140 per barrel on the spot, which is almost the historical maximum of 2008, when oil cost $147. On April 6, the price of oil will continue to show positive dynamics amid the escalation of the Middle East conflict, the expert said.
According to her, Russia benefits from high oil prices and hedges risks in the domestic market by banning gasoline exports.
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