How a lot further oil might OPEC+ pump to chill costs?


The brand of the Group of the Petroleum Exporting Nations (OPEC) is pictured on the wall of the brand new OPEC headquarters in Vienna March 16, 2010. REUTERS/Heinz-Peter Bader

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LONDON, March 11 (Reuters) – Saudi Arabia and the United Arab Emirates are among the many few oil producers globally with spare capability they may draw on rapidly to extend output, assist offset provide losses from Russia or elsewhere and ease costs, analysts say.

Based on the Worldwide Power Company, the 2 Gulf OPEC producers maintain about 1.8 million barrels per day of “short-order” spare capability, equal to nearly 2% of world demand and nearly all the full 2.2 million bpd of such capability out there.

Most spare capability held by Saudi Arabia and UAE

Rystad Power estimates that Saudi Arabia, the UAE, Iraq and Kuwait collectively have about 4 million bpd of spare capability that may be introduced onto the market inside a 3-6 month interval.

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“Most of those nations have huge onshore storage capabilities that may be tapped, which means that a number of million barrels could possibly be nominated for exports in weeks, if not days,” stated Louise Dickson of Rystad.

Saudi Arabia, Iraq, the UAE and Kuwait have 4 million bpd of spare capability – in 3-6 months

Nonetheless the quantity is lower than Russia produces. Russia rivals Saudi Arabia for the place of the world’s high exporter of crude and oil merchandise mixed, with exports of round 7 million bpd, or 7% of world provide.

Following Russia’s invasion of Ukraine that started on Feb. 24, concern about provide disruption has pushed worldwide oil costs to their highest since 2008 at over $139 a barrel this week.

Costs have since retreated on market expectations that some producers might pump extra.

OPEC+, comprising the Group of the Petroleum Exporting Nations, Russia and their allies, has a deal to steadily increase output every month by 400,000 bpd. The group has refused to behave extra rapidly whilst costs have soared.

Oil dropped by 13% on Wednesday after the UAE ambassador to Washington stated Abu Dhabi favoured a manufacturing hike and would encourage OPEC to think about increased output. learn extra

Additional UAE feedback downplayed the prospect of extra oil. Saudi Arabia has made no public touch upon the problem this week and Iraq – ready so as to add an additional 300,000 bpd within the IEA’s view – stated increased output was pointless.

A restoration in world oil demand, anticipated to hit pre-pandemic ranges this 12 months, and a scarcity of adequate funding has strained many producers’ capability. A number of nations, notably African members of OPEC+, have struggled to fulfill present output quotas. Right here is the IEA’s estimate.

Nigeria, Angola undershooting OPEC+ targets by largest quantity

The short-order spare capability estimate from the IEA, in its February Oil Market Report, excludes Iran, which it says might steadily add one other 1.3 million bpd if launched from sanctions.

The probabilities of that appeared to recede this week when talks between Iran and world powers to revive its 2015 nuclear deal hit issues. learn extra

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Modifying by Barbara Lewis

Our Requirements: The Thomson Reuters Belief Rules.


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