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By Tsvetana Paraskova
Middle Eastern oil producers and the OPEC+ group they are part of continued with their planned moderate monthly production increase despite the Russian invasion of Ukraine and the skyrocketing oil prices and the potential of a supply deficit the war has brought. OPEC put its demand growth forecast for 2022 under assessment, warning of a potential slowdown in global oil demand. As a result of high prices and regional benchmarks, as well as a tight global market, Saudi Arabia, the world’s largest crude oil exporter, raised the prices of its crude to Asia in April to all-time high premiums over the Dubai/Oman benchmark, off which Saudi supply to Asia is being priced. In addition, the biggest oil company in the world, Saudi Aramco, posted bumper profits amid rallying oil prices and signed several deals to expand its downstream presence in China, while the state energy firms of the United Arab Emirates (UAE) and Qatar announced partnerships to grow upstream, downstream, and in alternative energy sources such as hydrogen.
www.ogv.energy I April 2022
OPEC+ Leaves Production Unchanged Despite $100-Plus Oil In early March, the OPEC+ alliance in which Russia is a key member left its oil production plan intact, deciding to raise output by 400,000 barrels per day (bpd), and without mentioning the Russian invasion of Ukraine. During the meeting, “it was noted that current oil market fundamentals and the consensus on its outlook pointed to a well-balanced market, and that current volatility is not caused by changes in market fundamentals but by current geopolitical developments,” OPEC said in a statement.
According to the production schedule for April provided by OPEC, the OPEC+ alliance’s collective quota is 41.697 million bpd. The leaders of the pact, Saudi Arabia and Russia, each have a quota of 10.436 million bpd for April. Following the OPEC+ meeting, and amid expected strong demand for Middle Eastern crude in the wake of buyers’ shunning of Russian oil, Saudi Arabia raised the prices for its crude going to Asia in April by more than $2 per barrel, and some grades are being sold at a record-high premium over the Oman/Dubai prices. The price of the flagship Saudi grade, Arab Light, was hiked to $4.95 a barrel over Oman/Dubai—an all-time high differential for this type of crude.
