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Informist, Tuesday, Feb. 18, 2025

 

MUMBAI – The Organization of the Petroleum Exporting Countries and its allies are considering postponing the gradual reversal of voluntary production cuts, amounting to 2.2 million barrels per day, planned from April, Commerzbank AG said in a research report, citing a Bloomberg report. However, Russian Deputy Prime Minister Alexander Novak said that a possible postponement of the supply increases had not been discussed yet. "There are apparently doubts within OPEC and allies as to whether the market can absorb the additional supply without risking a further fall in prices," Carsten Fritsch, commodity analyst at Commerzbank AG said.

 

The Brent crude oil price fell back to $75 per barrel after briefly rising above the $80 per barrel-mark in mid-January due to the announcement of tariff measures by US President Donald Trump, his call for an increase in oil production by OPEC and the latest news on negotiations to end the war in Ukraine, the report said.

 

The oil market would still be slightly oversupplied this year even if OPEC and allies maintain their current level of oil production, according to the International Energy Agency's latest forecasts. "This means that there is no room for OPEC and allies to expand production. This would change, however, if the sanctions against Russia and Iran were to lead to a stronger decline in oil supply from these two countries," Fritsch said. "A decision on a renewed postponement of the planned increase in production would have to be made by the beginning of March," Fritsch added.

 

Meanwhile, Iraq's oil minister Monday said that the resumption of oil exports from the semi-autonomous Kurdish province in Northern Iraq is imminent. "The resumption of oil shipments would increase Iraq's oil supply by around 300,000 barrels per day ceteris paribus and lead to another problem. This is because Iraq has committed to limiting its production volume to 4 million barrels per day as part of the OPEC and allies' agreement. Hence, Iraq has no leeway to increase oil production if it does not want to violate its production ceiling. Last year already, Iraq produced more than agreed for a long time," Fritsch said.

 

Oil supplies from Iraq via a pipeline to the Turkish Mediterranean port of Ceyhan have been interrupted for almost two years due to a dispute over marketing rights and the ruling of an arbitration court in this matter.  End

 

US$1 = INR 86.95

IST, or Indian Standard Time, is five-and-a-half hours ahead of GMT

 

Reported by Ashutosh Pati

Edited by Saji George Titus

 

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