OPEC+ has said that it is not willing to respond and change its oil production targets after Russia announced a cut in its output for March, two delegates from the OPEC+ alliance told Reuters last weekend
Russian deputy prime minister, Alexander Novak, had said that Russia, a member of OPEC+, would cut its oil production by 500,000 barrels per day (bpd) in March, as a result of the Western sanctions and the price cap on Russian crude oil.
Reports say the announcement from Russia had sent oil prices up by 2% early on Friday and on course for what observers say will turn out to a significant gain for the week.
“As of today, we are fully selling the entire volume of oil produced, however, as stated earlier, we will not sell oil to those who directly or indirectly adhere to the principles of the ‘price cap’,” Novak said, as carried by Reuters.
The Russian official added that Russia would “voluntarily reduce production by 500,000 barrels per day in March.”
It is suggested that Russia may have discussed its plan to cut production with some members of the OPEC+ alliance, in which Russia is a key member leading the group of non-OPEC producers.
Russia, however, had not formally consulted with OPEC+ on its plans before announcing the decision, a Russian government source has told Reuters.
Last week, OPEC+ kept its production targets unchanged in a widely expected ‘wait-and-see’ approach to supply just ahead of the EU ban on Russian diesel and other petroleum products.
Supply from Russia, demand in China, the state of the economies in the coming months, and the trend in interest rate hikes in the U.S. and other major mature economies will be the key decision drivers for OPEC+ this year.
As will be the price of oil on the markets—the group led by Saudi Arabia and Russia is unlikely to leave oil trading below $80 per barrel.
By Ken Okoye