LONDON — OPEC and its allies decided on Tuesday to
maintain their policy of modestly boosting oil output next month as the rapidly
spreading Omicron variant has so far not heavily hit demand.
اضافة اعلان
The OPEC+ grouping, including top producers
Saudi Arabia and
Russia, has resisted US pressure for a wider opening of the taps in response to
high energy prices fuelling a surge in inflation across the world.
The 13 members of the
Organization of the Petroleum Exporting Countries (OPEC) and their 10 allies drastically slashed output in
2020 as the pandemic wreaked havoc with demand.
Last year they decided to step it up again gradually as
prices recovered, while reviewing the situation every month.
After a short videoconference meeting on Tuesday, the group
said it had agreed to raise output by 400,000 barrels per day in February, the
same increase as in previous months.
Since demand has barely been affected by
Omicron, "we
have to fulfill the obligations OPEC+ has set itself in relation to boosting
production, Russian Deputy Prime Minister Alexander Novak, who is responsible
for energy policy, told Rossiya 24 TV.
"The decision was widely expected, and oil prices
barely moved on the news," said Caroline Bain, chief commodities economist
at Capital Economics.
The price of Brent, Europe's benchmark oil contract, rose
slightly to $79.60 on the news of OPEC+'s decision, buoyed by the
organization’s optimistic outlook for demand.
Hopes for normality
The club's members had approved a similar hike at their
December meeting despite the emergence of Omicron, which had caused prices to
fall as markets fretted over the COVID variant's potential impact on the global
economy.
The December decision earned the thanks of the White House,
nervous of the effect of rising prices at American petrol stations, but it did
not prevent crude prices from recovering considerably from their previous
slump.
OPEC analysts told the group on Monday that Omicron would
have a moderate impact on demand and the rise in price is expected to continue
in 2022.
While the new COVID variant is spreading like wildfire
around the world, it appears to be far less severe than initially feared,
raising hopes that the pandemic could be overcome and life return to a little
more normality.
OPEC+'s next meeting has been fixed for February 2, when
members will take stock of the fast-moving developments in the pandemic.
On the eve of Tuesday's meeting, OPEC named Kuwaiti oil
executive Haitham Al-Ghais to succeed Secretary General Mohammad Barkindo on
August 1.
Al-Ghais, who was Kuwait's OPEC governor from 2017 to June
2021, is a deputy managing director of the
Kuwait Petroleum Corporation.
Iran exports
While OPEC+ countries have been gradually increasing output
again since last year, analysts note some countries, such as Nigeria and
Angola, have been struggling to lift production.
"Important here is that Russia did not lift production
in December which could be a sign that they are getting closer to their
capacity," SEB chief commodities analyst
Bjarne Schieldrop said.
For Russia, Novak said the rise announced on Tuesday
"means that from now until February we will have reversed around 85
percent of cuts in production" made in spring 2020, taking the country's
output 1.7 million bpd higher as compared with that period.
Another oil heavyweight, Iran, has seen its exports limited
by US sanctions.
Talks to revive an international deal, which curbed Iran's
nuclear activities in exchange for sanctions relief, are underway in Vienna.
They have dragged on since last year but negotiators are
pushing to conclude the talks to get the landmark 2015 agreement back on track.
It was thrown into disarray in 2018 when the US withdrew
from the accord.
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