OPEC and its allies agreed to another modest increase in production in March, sticking to their plan even as several members failed to deliver scheduled monthly supply increases, sending crude oil prices higher.
After a short meeting last Wednesday, the 23-nation alliance agreed to increase production by about 400,000 barrels per day for March, according to delegates, who asked not to be named because the information has not yet been released, which OPEC confirmed in a later statement.
The alliance made similar pledges in previous months, but a Bloomberg survey showed that the Organization of the Petroleum Exporting Countries (OPEC) barely managed to increase supplies in January due to issues ranging from underinvestment to militia unrest.
Oil prices rose to a seven-year high above $90 a barrel last month, raising expectations of a return to 3-digit prices, as supplies from OPEC+ and elsewhere failed to keep pace with the strong recovery in demand from the pandemic.
The widespread difficulties in restoring supplies are increasingly placing the burden on the group’s Gulf States, Saudi Arabia, the UAE, Iraq, and Kuwait.
Those conditions leave traders worried about the excess capacity available to cover any disruptions, whether it is deeper losses in Libya or another attack like what happened last month with a drone in Abu Dhabi.
“If prices continue their rapid rise, we see a path into Saudi Arabia that restores the role of regulator and increases production,” said Helima Croft, chief commodity strategist at RBC Capital Markets.