LONDON/DUBAI: OPEC+ is set to stick to an oil production deal agreed last year at its meeting on June 2 and raise July output targets by 432,000 barrels per day, six OPEC+ sources told Reuters, rebuffing Western calls for a faster increase to lower surging prices.
Western nations, grappling with record inflation rates that are threatening economic growth, have repeatedly asked the group to accelerate its output hikes.
Members from the group maintain that the oil market is balanced and that the recent price hikes are not related to fundamentals.
Under a deal reached in July last year, the Organization of the Petroleum Exporting Countries and allies led by Russia, have been easing record production cuts by increments of about 400,000 bpd every month.
The cuts are set to be fully unwound by the end of September but the group’s oil output has been falling sharply in reality as sanctions and buyer reluctance hit Russian output, and Nigeria and Angola pump well below target.
“Why change what works perfectly?” one of the sources said.
“We will announce that we are going to increase our production by 432,000 bpd even if we are no longer able to do so,” he added
In April, OPEC+ produced 2.6 million bpd below its targets, internal data shows, with Russia accounting for half of the shortfall.
Deputy Russian Prime Minister Alexander Novak said oil and condensate production in the country is expected to drop by more than 8 percent to 480 million — 500 million tons this year.
Oil prices are up 5 percent on the month so far in May, largely on expectations that the European Union will agree an oil embargo on Russian supplies.
Brent crude was trading near $115 a barrel on Thursday.
European Council President Charles Michel on Wednesday said he is confident that an agreement can be reached before the council’s next meeting on May 30.
Russia has been significantly boosting oil sales to China and India as sales to European buyers become more problematic.