Opec+ set to stick with modest supply hike plan even as EU eyes Russia ban

Opec+ set to stick with modest supply hike plan even as EU eyes Russia ban

Bloomberg / London

Europe may be edging closer to a ban on Russian oil imports, but the Opec+ alliance sees no need to divert from its long-established supply plan.

With shipments continuing to flow from Moscow – and proving more resilient than many anticipated – delegates say the 23-nation group will likely ratify another modest production increase when it gathers this week. The threat to demand in China from new lockdowns aimed at combatting Covid is a further reason to stay cautious, they said.

Led by Saudi Arabia, the coalition may have another reason to rebuff international calls to open the taps more quickly: loyalty to fellow member Moscow.

“There are no indications that the Saudis are changing course on the established easing formula at this stage,” said Helima Croft, commodities strategist at RBC Capital Markets LLC and a former CIA analyst.

While international crude prices are causing discomfort for consumers as they hover near $110 a barrel, the market has pulled back substantially from the highs struck after Russia’s invasion of Ukraine, giving the Organization of Petroleum Exporting Countries and its partners some room for manoeuvre.

The group has been restoring output halted during the pandemic in modest tranches, and is likely