Influential OPEC members Saudi Arabia and the United Arab Emirates have rebuffed calls to expel Russia from the OPEC+ group claiming the group had a long history of working together through armed conflicts.
Media reports also say that OPEC+ will not be easing its current 400,000 barrels a day easing of its global production cap for May when it meets tonight (Thursday).
OPEC+, includes the Saudi-led Organisation of the Petroleum Exporting Countries and Russia and has refused to pump more oil while oil prices surged to a high of $US139 a barrel in the wake of the Russian invasion of Ukraine.
The group has stuck to its pre-arranged plan to reduce the cap on production by 400,000 barrels a month and another meeting on Thursday is expected to confirm a further reduction in the output cap for May of 400,000 barrels a day.
That was introduced as part of a peace settlement when a panicked Saudi government and Russia engaged in a short but bitter price war in early 2020 in the depths of the first pandemic’s wave of lockdowns that slashed global demand for oil and helped prices for US crude plunge to an all-time low of minus $US37 a barrel in April 2020.
As part of an end to the price war, OPEC+ was formed with Russia as the main non-member and the cap of more than 5 million barrels a day established to stabilise prices above.
Now that is being reduced in a series of monthly reductions of 400,000 barrels a day.
“The U.S. and its partners are asking to politicize [OPEC’s relationship with Russia]. We will not do it,” Emirati Energy Minister Suhail bin Mohammed al-Mazrouei said Tuesday in Dubai, according to Reuters, confirming that the Gulf Emirate states remain interested in maximising revenues at the expense of other countries growth.
“When it comes to OPEC+, everyone leaves politics outside the door,” said Prince Abdulaziz at a conference in Dubai on Tuesday. “We managed to compartmentalize our political differences from what is for the common good of all of us.”
Oil prices were easier again on Tuesday with US West Texas crude falling under $US100 a barrel (to just over $US99 a barrel) at one stage before recovering to end the US session at $US105 a barrel for hardly any loss on the day. prices were around that level for US crude in early European trading on Wednesday.
But reports of a widening lockdown in Shanghai from yesterday afternoon (see separate story) are an indication that the Covid Omicron outbreak is not under control and could soon damage demand for oil. That will hit prices as it did two days ago.
