Morning Sun

OPEC fails to increase output as capacity troubles persist


The OPEC cartel -which has struggled for many months to revive oil supplies halted during the pandemic -- effectivel­y failed to increase output at all last month, as members remained plagued by capacity constraint­s.

While Iraq made a substantia­l boost, countries such as Libya and Nigeria saw their production fall amid operationa­l disruption­s and diminished investment, according to a Bloomberg survey. Even group leader Saudi Arabia didn’t hike by as much as permitted by their agreed quota.

Internatio­nal crude prices are holding near $105 a barrel as OPEC’S struggle is exacerbate­d by a de facto embargo on Russian supplies by many refiners following the invasion of Ukraine.

The lofty price levels are feeding into an inflationa­ry spike that’s battering consumers and threatenin­g growth, alarming policy makers around the world.

Key consumers such as the U.S. have grown exhausted with pressing the Saudis to fill in the supply gap, and taken to deploying emergency oil reserves. The kingdom’s refusal to open the taps is partly driven by political loyalty to Moscow, with which it jointly leads the “OPEC+” alliance of consumers that meets this week.

The coalition is likely to stick with its establishe­d plan, ratifying another modest addition of 430,000 barrels a day when it gathers on Thursday, according to delegates. But as the survey indicates, the group may struggle to implement much of the stipulated amount.

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