Opec+ coalition set for July quota increase

Opec+ coalition set for July quota increase

London, 1 June (Argus) — Opec+ is poised to agree another increase in its production target when ministers meet on 2 June, but the group's efforts to boost output face growing headwinds following the EU's deal to phase out Russian seaborne crude imports.

The coalition is set to rubberstamp a 432,000 b/d rise in its July target, in line with a roadmap sketched out last year, delegates told Argus. A bigger quota increase is unlikely, given the constraints on both upstream and downstream capacity and the slow pace at which Chinese demand is recovering from the latest wave of Covid-19.

Recently Opec+ has fallen way short of its output targets anyway, with average compliance among deal participants shooting up to 220pc in April from 129pc in January, according to an internal Opec document. The group's struggle to meet its collective production quota in recent months has been driven by Russian shortfalls, with Argus estimating that Moscow was over 1.3mn b/d shy of its April target.

Russian oil output ticked slightly higher on 1-29 May, according to data from state news agency Tass, but it remained well below target. This week's announcement of a partial EU embargo on Russian oil imports — which includes