OPEC+ will keep plan to increase production

LONDON — OPEC and allied oil-producing countries decided Thursday to gradually increase the flows they send to the world, even as Europe’s plan to sanction Russian oil threatens to yank millions of barrels off a global market already thirsty for crude.

The cautious approach from the OPEC+ alliance — which includes non-member Russia — will exacerbate a global energy crunch, with prices for oil and the gasoline, diesel and aviation fuel made from it expected to rise further.

At an online meeting, OPEC+ stuck with its road map to gradually open the oil taps, agreeing to add 432,000 barrels per day in June. The plan is to make those regular increases to restore cuts made in 2020 during the worst of the pandemic recession.

The boost in production remains smaller than what the U.S. and other countries are pressing for to ease high prices at the pump.

Analysts from Rystad Energy foresee the global market potentially losing up to 2 million barrels within six months if the 27 European Union countries approve a proposal to sanction Russian oil. Moscow is expected to see production fall after losing its biggest oil customer: Europe.

OPEC has made it clear to European officials that it will not hike production to make up for lost Russian oil. Some members already can’t meet their production quotas.

Russia is the world’s largest oil exporter with some 12% of global supply, and fears that its oil and natural gas could be cut off have kept energy prices high.

“The oil market has not fully priced in the potential of an EU oil embargo,” said Bjornar Tonhaugen, head of oil markets research at Rystad Energy, “so higher crude prices are to be expected in the summer months if it’s voted into law.”