Oil prices soared to a seven-year high above $90 a barrel last month, stirring expectations of a return to triple-digits, as supplies from OPEC+ and elsewhere failed to keep up with the vigorous recovery in demand from the pandemic. The rally is fanning the wave of inflation that’s frustrating central banks and inflicting a cost-of-living crisis on millions.
OPEC’s 13 members increased production by only 50,000 barrels a day in January as slight gains across the group were wiped out by a 140,000 barrel-a-day decline in Libya, according to the survey. They pumped 28.14 million barrels a day in total. The North African nation was stricken with a blockade of its western fields by militias, forcing the closure of its biggest reservoir, Sharara.
The 10 OPEC nations participating in an accord with non-members such as Russia increased by 160,000 barrels a day, about two-thirds of the targeted amount. One bright spot was Nigeria, where production rose by 100,000 barrels a day, with the key Forcados export system returning to normal operating levels.
The full 23-country OPEC+ coalition is expected to green-light the return of 400,000 barrels a day for March, though that too is beset by technical difficulties. Its compliance with cutbacks was 122% in December, according to data presented to an internal committee on Tuesday.
OPEC is likely to reach an agreement “to extend the current production policies for the short period to come,” Iraq Oil Minister Ihsan Abdul Jabbar said Tuesday.
Widespread difficulties in restoring supplies increasingly place the burden on the group’s Gulf nations: Saudi Arabia, the United Arab Emirates, Iraq and Kuwait. But this in turn is leaving traders anxious over the spare capacity they hold to cover any disruptions, whether deeper losses in Libya or another attack like last month’s drone strike in Abu Dhabi.