Economy News – Baghdad
On Monday, OPEC+ confirmed its strategy to gradually increase oil production starting in April and announced the removal of the U.S. Energy Information Administration from its list of secondary sources for gauging member states’ production output.
OPEC+ has consistently faced tensions with U.S. leadership during previous administrations, particularly during Donald Trump’s first term from 2016 to 2020. The group found itself at odds when it was urged to boost production to offset declines in Iranian supply triggered by U.S. sanctions.
Upon returning to the presidency, Trump called on the Organization of the Petroleum Exporting Countries (OPEC) to lower prices, arguing that high prices empowered Russia in its ongoing military actions in Ukraine.
Russian Deputy Prime Minister Alexander Novak reported that the joint ministerial committee of OPEC+ addressed Trump’s request to increase oil production and ultimately agreed to proceed with a gradual increase starting April 1, aligning with its previously established plans.
The committee also made significant adjustments to the list of secondary sources used for assessing production among member states.
“Following a thorough review by the OPEC General Secretariat, Kepler, Walliom, and ESA have been added as new secondary sources for evaluating crude oil production, while Restad Energy and energy information management were removed,” stated the committee.
An OPEC+ source clarified that the decision to exclude the Energy Information Administration was not politically motivated, attributing it instead to the agency’s failure to provide necessary information.
A spokesperson from Restad Energy highlighted the firm’s long-standing commercial relationship with OPEC, emphasizing that it is standard practice to utilize varied data providers for this aspect of their services.
OPEC+ utilizes secondary sources to mitigate disputes among its member states regarding production volumes, and adjustments to this list are made periodically.
Notably, in March 2022, OPEC+ removed the International Energy Agency from its list of secondary sources.
This latest meeting of the joint ministerial committee follows Trump’s announcement of new tariffs on imports from Mexico, Canada, and China, raising concerns about potential disruptions to oil supplies.
Fears surrounding the impact of U.S. sanctions on Russia propelled oil prices to $83 per barrel on January 15, a level that has yet to be surpassed.
Currently, the OPEC+ group is implementing a production reduction of 5.85 million barrels per day, representing approximately 5.7% of total global supplies, as part of a strategy initiated in 2022.
In December, the group extended its latest round of production cuts through the first quarter of 2025, postponing a planned increase in output to April. This decision reflects ongoing concerns over weak demand and increased supply pressure from non-member sources.
Under the existing plan, a gradual reduction of 2.2 million barrels per day is slated to begin, alongside an increase in production from the United Arab Emirates, continuing until September 2026.
It is anticipated that OPEC+ will make a definitive announcement regarding the April increase in early March, as is customary.
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