Economy 3 MIN READ

UPDATE 3-OPEC+ seen sticking to policy, ditches IEA data

March 31, 2022By Reuters

* OPEC+ full ministerial meeting on Thursday
* Expected to stick with planned May output target increase
* IEA may meet on Friday to decide on oil release

(Recasts, adds detail, oil price)
By Maha El Dahan and Ahmad Ghaddar
March 31 (Reuters) – OPEC and allies including Russia are expected to stick with plans for a modest May oil output increase on Thursday, sources said, as the group removed the International Energy Agency from its trusted data sources in another sign of a widening standoff with the West. OPEC+ is scheduled to hold a full ministerial meeting at 1130 GMT and is seen sticking to an existing deal to increase its May output target by about 432,000 barrels per day.

OPEC+ includes the Organization of Petroleum Exporting Countries (OPEC) members and others including Russia. The group has resisted repeated calls by the United States and the IEA to pump more crude to cool prices which rallied to near an all-time high on concerns about Russian supply disruptions after Washington and Brussels imposed sanctions on Moscow for its invasion of Ukraine. “Saudi Arabia will be keen to avoid falling out with Russia by adding extra barrels at a time when Russian production is struggling,” said Callum Macpherson at Investec. Saudi Arabia and the United Arab Emirates, which hold the bulk of spare production capacity within OPEC, have resisted calls for higher output, saying the group should stay out of politics and focus on balancing oil markets. The administration of U.S. President Joe Biden is weighing the release of up to 180 million barrels of oil from the Strategic Petroleum Reserve (SPR) and the IEA is set to meet on Friday to decide on a collective oil release. Brent crude futures were down 4% towards $109 per barrel in early trading on Thursday.

The Joint Technical Committee which advises OPEC+ decided on Wednesday to stop using IEA data, replacing it with reports from Wood Mackenzie and Rystad Energy, a source told Reuters. The Paris-based IEA advises Western governments on energy policy and has the United States as its top financier. The IEA did not immediately respond to a Reuters request for comment. Some OPEC+ members have been critical of IEA data, saying it was erroneous on several occasions and noted the IEA had advised against further investment in the hydrocarbons sector, failing to foresee growing demand. UAE energy minister Suhail al-Mazrouei told an industry conference this week that institutions like the IEA needed to be “more realistic” and not issue information that was “misleading”. The JTC uses the data to assess crude oil production and the conformity of participating countries with agreed output curbs.

(Reporting by Maha El Dahan; additional reporting by Noah Browning in London; writing by Moaz Abd-Alaziz; editing by
Leslie Adler and Jason Neely)

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