Uncertain about Iranian oil, OPEC + should stick to its policy
LONDON (Reuters) – OPEC + is likely to stick to the current pace of gradual easing of oil supply at a meeting on Tuesday, OPEC sources said, as producers balance out expectations of a recovery in demand against a possible increase in Iranian supply.
The Organization of the Petroleum Exporting Countries and its allies decided in April to return 2.1 million barrels per day (b / d) of supply to the market from May to July, as they predicted global demand would increase despite the surge in coronavirus cases in India.
Oil has extended this year’s rally since the decision and gained more than 30% in 2021 to $ 68 a barrel. Still, the prospect of higher Iranian production as negotiations progress on reviving its nuclear deal with world powers has limited the benefits.
Two OPEC + sources, speaking on condition of anonymity, said there had been no discussions on changing oil production cut levels for July, while two others said that producers should stick to their existing series of incremental increases in production.
“Not slacking off further on production cuts is a wise move, in my opinion,” said one of the OPEC + sources.
Still, the prospect of a higher Iranian bid cannot be ignored, said another OPEC + source, when asked about talks about a return of Iranian barrels.
Talks in Vienna between world powers and Iran on reviving the nuclear deal have been underway since April, and oil industry sources say Iranian oil exports have been increasing since late 2020.
A sharp slowdown in demand could hamper OPEC + plans, but for now, OPEC expects global oil demand to jump 6 million b / d in 2021, focused on the second semester. [OPEC/M]
OPEC + cut production to a record 9.7 million bpd last year as demand collapsed, much of it remaining in place. From July, OPEC + borders will stand at 5.8 million bpd.